From today, switching your bank account should be far easier, faster and less stressful - with some bank account customers being told they could save up to £600 by switching.
Banks have simplified and speeded up the process of switching current accounts from one provider to another.
A new ‘seven-day switch’ guarantee has been launched. In a nutshell, this guarantee ensures that all banks have simplified and speeded up the process of switching current accounts from one provider to another.
If you decide to switch, your existing bank must make sure that all your incoming and outgoing payments are automatically moved to your new account - and that your new account will be up and running within seven working days.
That’s a big change. Up until now it’s been a bit of a pain to switch, with transfers taking as long as 30 days in some cases (and it was your responsibility to ensure you transferred all your payments to the new account).
So you’ll no longer have to worry about missing crucial bills, or your salary not being sent to your new account. Everything should run smoothly, and switching could mean big savings.
So what does this change mean?
It means Britain’s 46 million current account holders should be able to move their bank account to another provider within seven days.
There are plenty of other benefits too:
- Your new provider will arrange any payments going out (like your direct debits), and payments coming in (like your salary) to be moved to your new account automatically
- Any cash you have in your old account will be sent across to your new account on your switch date
- Any payments accidentally made to your old account, or payments taken from it, will be automatically redirected to your new account for the first 13 months after you’ve switched. Plus the bank will also contact the sender of the payment and pass on your new account details to them
- If there are any issues with the switch, the new provider will contact you before the switch date
- If anything goes wrong with the switch and you miss any payments, your new bank will refund any charges so you are not out of pocket
- This service is free to use and you can agree a switch date that suits you
What’s not included in the service?
‘Recurring payments’ or ‘continuous payment authorities’ are NOT included as part of the guarantee. These are regular payments that only require your debit card details, but not your main bank account details (i.e your account number and sort code).
Things like gym memberships, magazine subscriptions, and services like Netflix and Lovefilm are often ‘recurring payments’ (because they only require your card details, not your bank account number or sort code).
In these cases, it’s your responsibility to let the companies know your new card details.
How long does the switching process take… really?
The switch takes seven working days start to finish. But you can agree a switchover date that is more than seven days in advance if that is more convenient for you.
However, the date when you receive your new debit card and PIN number isn’t covered by the seven day guarantee - so it’s possible you could be waiting longer than seven days to access your new account.
Do I have to tell my old bank?
Nope - your nice new bank will do that for you (and transfer over all your bits and bobs over automatically so you don’t have any hassle).
How can switching save me money?
Far too many of us stick with the same current account we’ve always had. At the moment, people switch their bank account once every 26 years on average - meaning you’re more likely to be divorced than change your current account! This is despite the fact that other banks can offer better deals like superior customer service, incentives of £100 to switch, better interest rates and more.
Now the switching process has had much of the time and stress taken out of it, more people are likely to switch their account.
According to the Money Advice Service: “It’s not uncommon to save £500 or £600 by switching your bank… [either] because you’re not paying fees or charges, or equally if you’re not getting interest that’s sitting in your current account, it can really add up.”
What if I’m overdrawn? Can I still switch?
Yes you can still switch – but it does depend on your new bank what happens with that overdraft.
If your new bank can’t help with your overdraft, you’ll have to arrange to repay your old bank what you owe.
Which banks are involved?
All of the major current account providers are involved in the new switching guarantee. Tesco are also coming on board in early 2013 and Virgin is planning to as well. Check out the full list here.
So how do I get switching?
Decided on which current account to switch to, let your new provider know and it’ll do all the work for you.
Your existing account will work as normal up until the seventh working day - so you don’t have to worry about where your money is coming in and out of.
On the seventh working day after you asked to switch, or on the day you agreed with your new bank, you’ll be able to access your new account. All your incoming and outgoing payments will be transferred and your old account will then be closed.
