Money & Finance
How to switch bank accounts
Switching bank accounts can seem daunting.
What happens to direct debits? Will my standing orders still be set up properly?
But in reality, thanks to the Current Account Switch Guarantee (more on this later), it couldn’t be easier.
In fact, changing banks is a great opportunity to get a better deal, whether on interest rates, service or your overdraft.
Some banks will even pay you to sign up with them.
Here’s what you need to know (the menu below will help you go straight to the section you want).
Choosing the right account
The first step is to work out what kind of current account would suit you.
Ask yourself: what are my spending habits? How often am I overdrawn?
Then arm yourself with your bank details before switching. Your new provider will need these to transfer your direct debits and standing orders for you.
While you don’t have to close your old account, it’s advised for peace of mind.
When should I switch?
It doesn’t really matter what day you want to switch (so long as it’s a working day).
But if all your direct debits and standing orders leave on the same day, don’t choose this day or one close to it.
It could save you a real headache.
The Current Account Switch Guarantee
Launched in 2013, the government-backed scheme has switched over 3 million accounts. You’re very unlikely to find a bank not signed up.
With more than 40 banks and building societies taking part, over 99% of UK current accounts are covered.
Find out which banks are registered on the scheme’s website.
Banks signed up to the scheme will:
* Transfer your money to your new current account
* Close your old current account
* Switch your direct debits and standing orders to your new account
* Inform your employer to pay your salary into your new account
Remember, if you opt for a bank not signed up to the scheme, you may need to do these things yourself.
The switching process
Provided your bank is signed up to the Switch Guarantee, the process is pretty automated.
To begin with, tell your new bank you want to switch and give them your account details.
You will then have to provide two forms of ID and proof of address and complete a Current Account Switch Agreement form and, once your new account is open, an account closure form.
These forms sound gruelling but they shouldn’t take longer than ten minutes.
After you’ve chosen a switch date, your new bank will provide confirmation the switch has begun.
You’ll continue using your old account until your chosen day, when your bank will move over any payments and your money to your new account.
It will then close the old account and confirm the switch is complete.
And that’s all there is to it!
What happens to my direct debits, standing orders and payments?
Your new bank will redirect any payments made to your old account and let the payee know your new account details.
For 36 months, it will also arrange for any payments made accidently to your old account to be redirected to your new one.
If your new bank is not signed up to the Guarantee, you should tell your employer your new bank details and re-arrange your direct debits and standing orders.
It’s worth ringing up your new bank and asking what its procedure is if you’re not sure.
How long will the switch take?
Your switch should only take 7 working days, if your new bank is signed up to the Switch Guarantee, the timer will begin from the working day you choose.
Oddly, your debit card and PIN aren’t covered by the seven-day guarantee, so don’t panic if it takes a little longer for these to arrive.
For banks not signed up, it should still only take ten working days or less, so make sure you get confirmation from them on how long it could take.
What if something goes wrong?
Your first port of call if something goes wrong is your new bank.
The bank you’ve switched to is responsible for refunding any charges you’ve had to pay because a direct debit or payment was transferred incorrectly.
If you feel like you’re shouting down a tunnel, the next step is to go the Financial Ombudsman Service (FOS) and make a complaint on A Spokesman Said – we’re here to help.
Can I still switch if I’m overdrawn on my account?
Yes, although you might not get an overdraft that matches your current offer.
If, however, you’re managing your current overdraft effectively, most banks should be happy to take you on.
What will happen to my account benefits, like free travel insurance?
Any perks you’re getting, such as discounted travel cover or free cinema tickets, will end when you switch accounts.
But don’t worry, just remember to keep your eye out for perks offered by new accounts when switching.
Make money switching
Plenty of banks offer cash incentives to switchers.