The OFT investigation into the current account market will also address concerns about the lack of effective competition to the "big four" UK banks.

But Thursday's announcement that the Co-operative Bank will be able to buy the 632 branches being sold by Lloyds Banking Group will bring a serious new competitor to the Scottish market.

The deal will see the Co-op pick up over 180 branches in Scotland, adding a fourth major player, and will triple the size of the Co-op's UK banking business, boosting its share of the current account market from 4.6% to 7%.

Kevin Mountford, head of banking at MoneySupermarket, says: "Creating a new 'real' challenger to the big banks may be the antidote the sector needs, and may encourage a culture of switching which has been lacking over the past few years, especially as The Co-operative Bank is seen as a more trusted brand than many of its rivals."

The OFT last looked at the current account market in 2008 and put forward a series of proposals intended to improve the switching process, increase the transparency of personal current account charges and allow people to manage their accounts more effectively. For example, banks must now send out an annual summary of the cost of a current account. They must also give illustrative scenarios to explain overdraft charges.

The latest probe will consider how the market has evolved over the past four years. If the banks have not made enough improvements, the OFT has threatened more radical action and could refer the industry to the Competition Commission.

But some experts remain doubtful that any real progress has been made. Trisha McAuley, deputy director at Consumer Focus Scotland, says: 'We've long held concerns that low levels of switching in financial services are a symptom of a sector that isn't as competitive as it should be.

"Mis-selling, unfair charges, high levels of complaints, opaque products with complex terms and conditions and a sector dominated by a handful of big banks and building societies are also signs that customers are not being well served. The time is right for a major shake-up of the personal current account market."

The recent scandals in the sector have caused a surge in switchers. John Crossley, head of current accounts at Nationwide building society, says: "In the last week, the number of people switching their main current account to the society through all channels – branch, telephone and online – has jumped 67% compared to the week before recent problems experienced by some of the big banks."

But switching rates generally remain low. In 2010, only 3.8% of customers switched their current account. In other words, we move our current account on average only every 26 years. The rate is way below the switching rate for other financial products. The rate for utilities, for example, is more than 15%, or more than 30% for car insurance.

The hassle of switching also puts off many customers. Most banks have dedicated switching services, but the process can still take about three weeks – and even longer in some cases.

The industry is working on a free redirection service that will complete the process in seven working days, but it is not expected to go live until next September.

Ms McAuley says: "Promoting switching and tackling the lack of transparency over fees and charges would be a start to kick-start competition and force providers to put a lot more into customer service than they currently do."

The OFT is not expected to complete its review until the end of the year. In the meantime, customers should consider switching their current account as they could probably get a better deal elsewhere.

If your current account is often in credit, Bank of Scotland's Classic Account with Vantage is worth considering. Vantage is a free addition to the Classic Account, but it means you can earn credit interest of up to 3% Equivalent Annual Rate (EAR), depending on the size of the balance. However, you must pay in at least £1000 every month and keep your account in credit.

The 123 Current Account from Santander is another option. You can earn up to 3% EAR on your credit balance. Plus, you get 1% cashback on your water and council tax bills, 2% on gas and electricity bills and 3% on mobile phone, landline, broadband and paid-for TV packages. However, there is a monthly fee of £2, so you have to work out whether the account represents value for money.

For many people, the overdraft rate on their current account is more important than any credit interest or cashback. The Co-operative Bank's Current Account Plus includes a fee-free overdraft of up to £200, with an interest rate of 15.9%. To qualify for the account, customers must make a minimum monthly deposit of £800.

Or, there's the Current Account Plus from Clydesdale Bank. There are no fees for planned overdrafts and the interest rate is 18.85%. However, you would pay interest of 29.99% if you dipped into the red without permission