How to switch your bank account
Most of us are guilty of sticking with the same bank account year after year. Despite the fact there are few rewards for our loyalty, switching current accounts can seem like too much hassle and the thought of anything going wrong, resulting in missed payments, is enough to put many of us off.
The good news is that from 16 September 2013, the Current Account Switch Service came into effect, which means switching to another provider is much easier. Banks and building societies now have to transfer customers' accounts within seven working days if they want to take their custom elsewhere.
So, if you're fed up with earning paltry rates of interest when you're in credit, or being hit with hefty overdraft fees when you go into the red, or you're simply sick of poor customer service, then it's time to vote with your feet.
Here, we explain everything you need to know about how to switch your bank account...
How do I choose the right account?
When deciding which bank account to switch to, think about how you use your current account. If you tend to keep a decent-sized balance in there most months, then you should be looking for an account which pay decent interest - some now pay more than you would get on a standard savings account.
However, if you find yourself regularly using your overdraft, then you should choose an account with low authorised overdraft charges, or an interest-free buffer if you only tend to go into the red by a few pounds each month.
It's also worth doing a bit of research into how banks' customers rate them. Some banks tend to do much better than others when it comes to responding to problems quickly, so it's worth going for a provider with a decent track record in customer service.
If you tend to use your existing bank's branches regularly, then you'll also need to consider which alternative banks have branches close to you.
What about additional benefits?
If you currently have a packaged account for which you pay a monthly fee, then the chances are you'll already be getting a range of benefits, which usually include things such as breakdown cover, mobile phone insurance and travel insurance. If you're planning on moving to an account which doesn't charge a fee, and so doesn't provide additional benefits, then you may want to consider taking them out separately.
Often people with packaged accounts don't make use of all the benefits they come with anyway, so switching can provide a useful opportunity to weigh up which benefits you really need and which you could live without.
What do I need to do once I've picked a new account?
Contact the bank in question and let them know that you want to switch. You will be asked to provide your existing account details and two forms of identification. Once of these will need to have a photograph, so either your passport or driving licence will do, and the other will need to show proof of address, such as a utility bill or council tax statement.
You will also have to sign a 'switching mandate'. This effectively gives your new bank permission to get details of all your standing orders and direct debits from your existing bank, so that they can transfer them across.
The only other bit of information you're likely to need is your employer's details, so that your salary can go directly into your new account.
The the transfer will take place within seven working days.
And the Current Account Switch guarantee, which is part of the switch service, provides additional peace of mind stating, for example, that any payments made into your old account by mistake will be automatically redirected to your new one for the first 13 months from your switch date. If an error does occur and you are charged as a result, you will be fully refunded.
What can I expect from the switching process?
The seven-day switch rules are designed to encourage more current account customers to switch to alternative deals, as well as making the market more competitive.
Banks started to improve their offerings to customers ahead of the seven-day switch rules, so read up about what's on offer to help you to decide which bank to switch to.
The content on this page is supplied by MoneySupermarket.com.
Last updated: about 1 month ago