Switching bank accounts explained

Switching bank accounts used to be a tricky process, but not anymore. Simply use our comparison tool to find an account that’s right for you. Apply with a new bank and they’ll do all the work of switching your account over.

Switching bank accounts used to be a tricky process, but not anymore. Simply use our comparison tool to find an account that’s right for you. Apply with a new bank and they’ll do all the work of switching your account over.

Anelda Knoesen
From the Money team
14
minute read
Do you know someone who could benefit from this article?
Posted 3 AUGUST 2021

Why do people switch bank accounts?

Many people switch bank accounts to gain benefits that another bank may offer, like lower interest rates or a signing-on bonus. 

Banks offer attractive incentives to gain new customers. If all you’ve got to do is switch from your old bank to get a cash bonus, better terms or even a gift voucher, it can be worth it for some people to make the move. 

If you’re getting everything you need from your bank and you’re happy with the service, you probably won’t want to switch. A lot of people stick with the same bank their whole life, but in doing so they may well be missing out on some great savings and features. 

How easy is it to switch your current account?

It’s really easy, as the two banks do most of the work for you. The Current Account Switch Guarantee promises that the switch should be “simple, reliable and stress-free”. You just have to make sure you find the right account for you, that you’re eligible for the account and produce any identification documents required. 

Typical eligibility requirements for switching include: 

  • having a minimum number of direct debits 
  • a set minimum amount entering the account each month

Current account switching service

The current account switching service is a free offering that allows you to close a current account and transfer everything across to a new account. It’s designed to make account switching completely hassle-free which means all your old direct debits, standing orders, your salary etc. all move along with you. With the current account switching service, this should all be sorted for you in just seven days. The service covers the vast majority of UK current accounts, but doesn’t apply to some account types.

Which accounts can’t be switched?

There are a few types of accounts that can’t be switched: 

How long does it take to switch bank accounts?

As long as your bank/building society and the bank/building society you want to switch to is signed up to the 7-day current account switch service (which covers 99% of UK current accounts) it will take a maximum of seven working days to switch accounts. This agreement was introduced in September 2013, to make life simpler for customers when account switching. 

You can choose to have the switch take longer if there is a certain day you would like to switch on. You might also find that business accounts take longer to transition across to different banks. 

But remember, account opening and account switching aren’t the same thing. The new bank will have to carry out security checks and so on before they open your new account, and the seven-day switching process can’t start until the account is open.

Why should I switch bank accounts? 

You may have an overdraft that you’re paying high fees on. If you’re tired of incurring charges, you might simply want to review your options. 

If another bank will give you an interest-free overdraft as a ‘signing on’ bonus, then it could make good sense for you to switch bank accounts. Although you will need to go through a credit check and be accepted by the new bank to get this offer so keep this in mind. An arranged overdraft should only be seen as a last resort though, not for non-essential spending. 

What reasons are there to switch?

You may be looking for a better deal than your current account offers, like cashback on your spending. Some banks also offer the best savings rates or lower interest rate mortgages or loans to their current account customers.  
 
Packaged accounts, which include things like breakdown cover, gadget insurance or travel insurance, can be tempting too. However, these types of accounts may come with a monthly or annual fee, so you’ll need to check whether the benefits outweigh the cost. 
 
Not all digital banking services are the same either, and you may prefer the options available from a different bank, like: 

  • being able to block gambling sites 
  • set limits for spending 
  • round up transactions for saving 
  • freezing cards instantly if you’ve lost or misplaced them 
  • budgeting apps that help you to manage your money better 
  • spending locations and notifications which can help you check for identity theft
  • photographing cheques so you don’t have to go to a branch to pay them in 

Another possible attraction is an interest-free overdraft as a ‘signing on’ bonus. You’ll need to go through a credit check and be accepted by the new bank to get this offer, so keep this in mind. But, be warned, there’s usually little difference between the overdraft rates of different banks. Most are on, or close to, 35-40% for standard current accounts. However, it is possible to find accounts offering lower rates, so it’s well worth comparing current accounts. 
 
And remember, an overdraft should only be seen as a last resort, not for non-essential spending. 
 
Let’s also not forget that in recent years, banks have been closing many branches. If you prefer to do your banking this way and your branch is shutting its doors, then you may want to switch to a bank that still has a local branch – although there’s no guarantee it will stay open. 

How do I switch bank accounts?

The good news is that your new bank will do most of the work for you. You need to complete your sign up with two forms of identification and proof of address to make sure you comply with money-laundering regulations. 
 
When you open the account, you’ll have to tell your new bank that you want to switch and they’ll go to work for you. All you’re required to do is fill in the Current Account Switch Agreement and the account closure form. You can specify a specific date, as long as it is seven working days on from when you submit the relevant forms.   
 
Just continue to use your old account until the agreed switch date, by which time you should have a new debit card and the banks will have worked together to transfer any funds, direct debits and standing orders that are linked to the current account. You will just need to acknowledge the confirmation sent to let you know the whole process is complete. 

Switching joint accounts

If you want to switch a joint account, both of you must agree to the account switching. If you’re both wanting to make the change, then the process is basically the same as switching a single account. It just needs you both to provide the two forms of ID and proof of address. 

If only one of you applies for a switch, your application will be rejected. You also have to be switching to another joint account held by the same two people, and can’t use the Current Account Switch Service to switch from a joint account to a sole account.

What, if anything, will I need to do? 

To start a switch to a new bank you’ll need to fill out a Current Account Switch Agreement form – for your new current account – and a Current Account Closure Instruction form, for your old current account. 

You’re likely to need to agree any arranged overdraft facilities you want with your new bank before initiating the switch – and this will also be subject to its own eligibility requirements. So, if the overdraft is important, you’ll need to sort this out first. 

It’s also a good idea to go through your payments to check if there are any that you no longer need to make and cancel them. There’s no point in carrying over unwanted payments – and it could save you paying out for subscriptions you no longer want. 

You’ll also need to download any documents from your old account that you want to keep, like bank statements.  

If you’ve allowed apps permission to access your bank account, the authorisation you gave will end when your account closes. If you want to continue to use them, you’ll need to re-authorise your favourite banking apps with your new account details. 

Once the switch has happened it’s a good idea to check all the details are correct, especially for regular incoming and outgoing payments. 

Once the switch has taken place and your old account has been closed, you should stop using any cards associated with your old account and destroy them. 

What offers can you get when switching bank accounts?

By switching bank accounts, you might be eligible for various offers or bonuses. These are designed to make account switching more tempting, so they’re well worth looking at. Common examples for account-switching offers include interest-free arranged overdrafts, cashback rewards or introductory interest rates.

Are there any implications with switching bank accounts?

Switching bank accounts can come with some consequences. Make sure you check everything carefully before switching. Weigh up the benefits you might lose by switching against those that you gain. For example, you may have an existing overdraft and plan to switch, but find that when you do so, the new bank isn’t willing to give you the same level of overdraft.   

If any direct debits/payments are missed during the switch, your previous bank will redirect your payments to your new bank account, to make sure you don’t miss any payments. This is known as the payment redirect service. 

The service is in place for 36 months, but you should check your BACs payments (electronic payment from one bank to another - standing orders and direct debits) to make sure all payments have been moved over after the switch.    

You may find that as a new customer of a bank, you’re not yet able to benefit from all of their offers. This is another good reason to make sure you do your due diligence before signing up. 

What happens to payments being made to me if I switch bank accounts?

The switching service will automatically redirect payments to your new account. Every time a payment is redirected, an automatic message is sent to the person or organisation making it, to let them know the new account details, so that they can update their records. For security, some organisations will contact you to personally confirm that your details have changed.  

It can be a good idea to give your new account details to people paying you regularly, like your employer, benefits agency or pension provider.  

Switching a current account with standing orders

The Current Account Switch Guarantee also takes care of standing orders or regular payments that you’ve set up, as well as direct debits where you’ve agreed that payments can be taken from your account. 

Your new bank should set up standing orders to match the existing ones in your old account.

What’s the best way to choose a new account?

Start by thinking about what matters most to you, for example: 

  • interest on your current account 
  • low overdraft rates 
  • perks for switching 
  • rewards and added extras in packaged accounts 
  • access to better interest rates on other bank products 
  • a free current account

With this knowledge in mind, you can start weighing up your options by comparing bank accounts and seeing how they stack up against your criteria. It’s also worth giving the latest independent banking customer satisfaction ratings a look too – to see how the new bank you’re considering fares. 

When’s the best time to switch accounts?

To make things easier, you can choose a switch date to suit you. You might want to minimise the chances for anything going wrong by picking a date after most of your payments have gone out for that month, or maybe choose a date that fits in with moving house or getting married. 
 
Just make sure you allow seven working days for the switch to take place and that your chosen date isn’t a Saturday, Sunday or Bank Holiday.  
 
Remember you can still use your old account right up until your agreed switch date. This includes paying with your cards, and using online or mobile banking. But don’t set up any new direct debits with your old bank during this period – set them up in your new account to make sure they aren’t missed during the switch. 

How often can you switch your current account?

The Financial Conduct Authority says there's no limit to how often you can switch accounts. But switching accounts goes on your credit file and only keeping your bank account for a short period could have an impact on your credit score. 

If you like to switch accounts frequently to make the most of the freebies on offer, make sure you understand any terms and conditions of any offers. Some banks will only offer them to customers who’ve never switched to them before. Each current account has its own rules so keep a close eye out. 

Does switching current accounts impact your credit score?

Switching accounts can potentially affect your credit score. This is because your credit history is supported by having good banking history and you won’t build up one with your new bank for a while. So, it's not advisable to switch too often from that point of view.  

If you're applying for a mortgage, it’s potentially a good idea not to switch accounts until after your application has been processed, to avoid any possible impact on your credit score. 

Your credit score may also be impacted if you change how you operate an arranged overdraft, like how much credit you’re using. Lenders can be happier to lend to loyal customers, so this might be a small consideration. 

Can you switch current accounts while overdrawn? 

Yes, but you’ll need to find a bank that will agree to letting you have an overdraft before you switch. Talk to your potential new bank before you open an account to see if you fit the eligibility criteria for an overdraft. Also, even if you’re account switching, you’ll still have to repay your overdrawn balance.

Can I switch if it’s a joint account?

Yes, but you’ll need the permission of all the joint account holders. If you haven’t got permission you won’t be able to switch. 

Frequently asked questions

Do I have to close my old current account?

Your old account will be closed automatically if you use the Switch Guarantee service. 

If you want to leave your old account open when you open a new bank account you can’t use the Switch Guarantee. You’ll need to move any direct debits and standing orders yourself and inform anyone taking money from your account or paying you of your new account details. 

Can I just open a new current account without having to switch?

Yes, as long as you fit the eligibility criteria you can open a new current account. Some accounts expect you to pay in a set amount of money every month or to have your salary paid it. 
 
For some people, it can be a good idea to have more than one bank account. You might want a joint account for bills, for example, or a foreign currency account.  
 
If you open a new account and want to do things like move your direct debits, you’ll have to organise this yourself. 

If I switch my current account, will my other accounts at the bank be moved?

No. If you’ve also got things like savings accounts with your old bank, they won’t be moved. The switching service applies only to current accounts.

Does the switch service and guarantee apply to all UK banks?

Not all, but it does cover 99% of UK current accounts. There are over 40 UK banks and building societies that are signed up to the Current Account Switch Service. See the full list of banks in the switch scheme.

What happens if there’s a problem with the switch?

If anything goes wrong with the switch, tell your new bank as soon as possible. They should refund you any interest paid or lost and any charges that you’ve had to pay on either your old or new account if it’s because of a problem with the switch. 
 
If you’re still not happy you should use the bank’s formal complaints procedure. If at the end of that you are still unhappy you could consider going to the Financial Ombudsman. 

When can I set up new direct debits?

You can start setting up brand new Direct Debits and standing orders on your new account as soon as it’s open. But it’s best not to set up new ones with your old bank – particularly in the seven-day period of the switch as they could easily get missed.  
 
There’s no need to set up new direct debits for existing payments as these will all automatically be moved over during the switch process. 

When will the money in my old account be moved to my new account?

You’ll be able to use any money in your old account up to your switch date and then it will be moved to your new account. 

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