Why would anybody go through all the stress of switching their bank accounts? I mean, all those payments, all the bills you pay, the money coming in- why would you go through all that stress to swap? Well, there are a number of reasons that might make it worth switching:
Have you moved recently? Is your bank still nearby, are you able to get there at lunchtime/after work/during the weekend in case you need to cash that cheque?
Are you getting any benefits from your account now, or are you one of the millions of people with a bank account that pays no, or very low interest?
Does your bank have an App that’s actually useful/easy to use? Could this save you going to an ATM/bank branch if you can check your balance on your phone very easily
Has your bank had IT issues? If you are one of the customers with TSB- have the IT issues they faced affected you? If so, it would be worth thinking about moving to a bank that hasn’t had these issues.
Are you thinking about buying a house/remortgaging? If so, there are a number of banks that have special offers that are only available to customers that already bank with them.
You want to bank with a more ethical bank- yes they do actually exist. You do need to search them out a little more, and decide exactly what they mean by ethical- but this could be the chance to do so.
So, now you have decided you are going to switch- how do you go about it?
Decide what you want from your new bank-
Is there are branch near where you live/work and does it open when you need it to? It might be this isn’t as important to you, but every now and again it is useful to see a person
Do they offer online/telephone banking. I’d say any bank that doesn’t offer one of these two services is rather in the dark ages!
Do they offer an app- and does it work on your device? Most banks have an App that works on both iPhone/Android, but if you have a Windows phone (or anything else), you might want to check if you can still get an App. Check out the reviews/screenshot of the app if you want/need functionality like the ability to carry out transactions on the move- some banks don’t support this.
Teaser offers- such as a great interest rate for a year, this can be great if they tempt you in. Just remember that after the initial year- that this will disappear
Make sure they are part of the “current account switch” service. This will make the switch much easier and require very little effort/time from you
Before you start the switch:
Before you open the new account, review your current account. Check the direct debits/standing orders- are there any that shouldn’t be there? Are you still paying for that magazine subscription and never reading it? Or that gym subscription that you haven’t been to in a year? If so, cancel them before starting the transfer!
Work out the best date for the switch, it’s not a great idea to choose payday/the day your bills all go out. Now, this should all be handled by the switching service- but to make it easier for you, why not choose a date away from these payments etc?
If you have an overdraft, you need to check that the new bank will honour this overdraft- they don’t have to, and might get stopped if they don’t. For maximum easiness, wait until you have cleared that overdraft before a switch
Print off/download the statements from your old bank. Once the switch has been completed you will likely not have access to these from your old bank
Keep a small amount of cash ready to use on the switch date/day before, just in case anything goes wrong- you are still able to buy your lunch etc (or use your credit card etc)
During the switch:
Your new bank will contact your old bank and ask for a list of all the direct debits/standing orders on this account.
You may be unable to access your current account via online banking/app during the switch
Your new card/pin has probably already arrived- check that these work and you are able to access the account- you probably won’t be able to withdraw any cash until the switch has completed however!
After the switch
Check that the direct debits have been setup with the correct amounts/dates etc. There should be no issues and you can make a complaint if it has gone wrong
Make sure you can use the new bank account- online/app/ATM etc.
Tell anybody that pays you to use the new details- eg. your payroll department. You can still get paid on your old bank account details for 3 years- but anybody that does this will get a warning that you have switched accounts.
Make sure you fulfill the conditions of the special offer that you took up- if this is making sure enough money is deposited each month- make sure this happens!
If you opened the current account for the regular saver, or attached ISA- make sure that you apply for this as well, as its unlikely to happen automatically with your current account setup.
That’s it- you have now switched your bank accounts and taken advantage of the special offer/interest rate that you wanted.
Every time that you open/close a bank account- it will affect your credit rating/score. Usually this won’t matter that much, but if you were to open a large number of accounts and close the old ones (which is what happens with the above switching process), then this rating/score might be adversely affected. This can be even more pronounced if you are moving overdraft accounts around.
Any special deals that you had with your old bank will be lost- the switching service closes the old account. So, if you have a special savings rate from 10 years ago, this might not be the best thing for you!
You cannot switch a joint account unless you have the permission of both people on the account. So you need to let whoever you have the account with that you want to switch this and get their permission
You can only use this service to switch what’s known as a “current account”, so you cannot switch a savings account/ISA etc. It must be a current account with one of the many providers in the UK.
There are some more rules/conditions listed on the Current Account service page as well here