Switching bank accounts explained
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.
Why do people switch bank accounts?
Many people switch bank accounts to gain benefits that another bank may offer, such as lower interest rates or a signing on bonus.
Banks offer attractive incentives to gain new customers. If all you have to do is switch from your old bank to get a cash bonus, better terms or even a gift voucher, that can be all it takes 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 long will it take to switch bank accounts?
As long as your bank and the bank you want to switch to is signed up to the 7 day switch service (99% are covered!) 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 moving to a new current account.
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.
What reasons are there to switch?
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 overdraft should only be seen as a last resort though, not for non-essential spending.
How to 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.
Are there any implications with switching bank accounts?
Switching bank accounts can come with some consequences. Make sure you check everything carefully before switching – and 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 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 ensure you don’t miss any payments – this is often known as the payment redirect service.
The service is often 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 ensure all payments have been moved over after the switch
You may find that as a new customer to 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.
You can compare bank accounts using our comparison service. Get comparing to find the right account for you.