Switching your bank account is a great way to take advantage of the best interest rates and cashback and rewards accounts that are currently available. But because our bank details are so tied up with the rest of our lives, it might feel as though switching is too complicated to bother with.
Nothing could be further from the truth: switching your current account is very simple and nearly automatic.
Why switch bank accounts?
Current accounts usually offer the most competitive interest rates and benefits as short-term incentives to get you to sign up. Once the introductory period is over, however, your interest rate is likely to drop significantly, while the perks and benefits will expire.
Depending on the bank, the perks you can get from switching include:
- Higher interest rates
- Lower overdraft fees
- Discounts on shopping, travelling, cinema tickets and more
- Cashback incentives
You’re entitled to switch your personal current account using this service, though small businesses and charities are also allowed.
How switching bank accounts works
The first step to switching bank accounts is to shop around for a new one you like the look of. MoneySuperMarket is a good way to help you compare and choose from a range of current accounts.
It works via the Current Account Switch Service, which is part of Pay UK, the organisation that keeps British banking running smoothly.
When you decide to switch, the CASS guarantees to complete the transfer within seven days. Your old bank talks to the new one, and everything is switched over seamlessly, including your balance, direct debits and salary.
Once you’ve picked a new account, you’ll be asked to apply by filling in a few details about yourself and your finances. If you’re accepted, your new bank will offer to make the switch for you automatically.
It will liaise with your existing bank, which will transfer over all the necessary information so they can open your account with minimal hassle on your end.
The switch service guarantees that the swap will be completed within seven working days. It will also make sure it transfers every incoming and outgoing payment to your new account – including your wages.
Are you eligible for the current account switch service?
While the Current Account Switch Service doesn’t have a strict set of requirements, there are a couple of things you can do to make acceptance more likely:
- Minimise the number of direct debits on your existing account
- Regularly deposit money into your account
What’s the difference between a full and partial switch?
There are two types of current account switches, partial and full:
- Full switch: This transfers all of your details and payments from the old account to the new one within seven working days. Your previous account is then closed. This service is available to individuals, small businesses and charities
- Partial switch: This transfers the information you want from one account to another, but it doesn’t close the existing account. You therefore get to pick and choose which payment arrangements and transactions are transferred, and you end up with two accounts. The seven-day guarantee does not apply to a partial switch however
Switching current accounts: Things to consider
As with any major financial decision, switching your bank account can have unintended consequences. It’s definitely worth thinking about the following:
- Recurring debit card payments are not moved: If you have any ongoing payments from your debit card rather than from your account itself, you’ll have to amend these after you switch. It’ll usually just be a question of updating your payees with your new card details
- You can switch to a joint account: The switch service will let you link your finances with a partner by moving from a sole to a joint account. This doesn’t work the other way round, however
- Other banking products won’t be moved: Anything like an ISA, a credit card or a separate savings account you have with your old bank will not be moved, and you should get to keep them – though there are certain savings products which you could lose if you move bank. Otherwise, any direct debit you have set up to make continuous payments into these other accounts will be transferred to your new current account
- You can specify a switch date: This has to be set at least seven days in advance
- Switching accounts can affect your credit score: In rare cases where you have had an application rejected or you’ve tried to open several new accounts, you may see a drop in your credit score
Compare current accounts
The MoneySuperMarket bank account comparison tool allows you to browse a range of accounts and providers from across the market to find the one most suitable for you.
Find a tailored list of suitable options that will fit your banking needs in one place. You’ll be able to compare benefits and rewards as well as anything else that will help you make your decision. Once you know what you want, you can click through to the provider where you can start the process of switching your current account.
You will usually have to fill in an application form, undergo a credit check and provide proof of identity and address, such as a passport and a utility (gas/electricity/water) bill.