Switching bank accounts is easy and here's how to do it
Many people will set up a bank account and stick with it for the majority of their lives. After all, it soon becomes ingrained into everything you do. Your bills, direct debits, and paycheque often go in and out of that one account. However, it’s becoming increasingly popular to shop around and switch banks. There are many reasons to do so, and thankfully there are some laws in places to make the process a lot easier than it once was.
In this guide, we look at how you can switch bank accounts in the UK. We start by examining what the process entails and some reasons why you may consider it. We also guide you through the process so that you get everything you need out of it. Finally, we’ll look at what happens after you switch.
What is Bank Switching?
Although the term is fairly indicative of what the process entails, there’s far more to switching banks than just opening a new account with another provider. As you can imagine, changing over all of your direct debits, automatic payments, and account details would be a complete nightmare. Instead, there is the Current Account Switch Service (CASS) which makes the whole process a lot easier.
There are over 40 banks and building societies in the UK that have signed up to the CASS service and over 4 million current accounts have been transferred. The incentive is a standardised method for banks to transfer customer accounts. It’s a hassle-free way for customers to have their details and money automatically transferred to their new provider.
CASS comes with a guarantee that all of the payments associated with your old account will be switched over to your new one. That means you don’t have to worry about your finances getting messy or confused. Additionally, the service means that any payments made to your old account will be automatically redirected to your new one.
Not only does the CASS system help customers, but it also means that all banks that are signed up to it have a cohesive set of rules that they can follow.
Why Should I Switch Bank Accounts?
You may be wondering why you’d ever want to switch your bank account. There’s a high chance that everything is working just fine for you, and you’re familiar with the way your current provider handles things. However, there are some valid reasons you may consider changing:
A Better Deal
Banking is a competitive marketplace these days, and financial institutions are trying to outmanoeuvre each other to attract customers. Such rivalry is often a good thing for consumers, as it means there are more attractive rates on the market. By changing your bank, you may be able to get a better deal on your savings interest, have more access to credit, or a more suitable overdraft.
Branch locations often change, and people regularly move house. You may find that your existing provider no longer has a branch that’s close by. If you have a location of a competitor bank nearby, it makes a lot of sense to change accounts.
Such is the demand for customers than many financial institutions will offer attractive incentives to get you to switch. These can range from free gifts and even straight up cash. You may also get a preferential rate on a credit card or loan if you change provider.
You may find that either your financial services or the customer service you receive aren’t quite up to scratch. Many banks are striving to put the customer first, so changing could mean you gain a better experience by switching.
How Do I Switch Banks?
Now that you’re familiar with why you should consider transferring and how the service is set up, it’s time to address how you should actually go about switching your bank account. There are some steps that you need to take:
Choose Your Account
As we’ve mentioned, there are a lot of banks out there, many of them vying for your business. It’s a good idea to shop around before you commit to one. We have a range of articles available on all types of accounts, including the best current accounts.
Weigh up your options and decide which kind of service is right for you. For example, if you generally have a lot of money in your account, try to pick one that rewards that with high interest. Alternatively, if you rely on your overdraft a lot, choose a bank that has low fees.
Compare Your Options
It’s likely that you’ll have a few accounts that match your requirements. Compare all of them to find out which bank provides the most attractive package all around. Consider elements such as benefits, incentives, location, service, and convenience. Read reviews about the banking products you’re choosing from and make an informed decision. Don’t be afraid to contact the bank directly for more information, and ensure that they’re part of the CASS scheme.
Open Your New Account
You will have to open your new bank account to get the procedure underway. This process is usually straightforward, but you’ll need to have some ID with you, as well as details of your old account. This includes bank statements as well as another proof of address.
Choose Your Switch Date
One of the benefits of the CASS scheme is that it allows you to choose a switch date that’s convenient for you. It takes seven working days for the process to complete, so bear in mind that your selected date can’t be a weekend or bank holiday.
You can continue using your existing account as usual at this point, meaning that payments will be made and you’ll have access to your cards. However, if you set up any new direct debits during the seven day period, these won’t be transferred across.
Start the Switch
Once everything is in place, you can inform your new bank that you want to move your old account over. They will then take care of the whole process for you. There are some forms that you’ll need to fill in and sign, including a ‘Current Account Switch Agreement’ as well as the ‘Current Account Closure Instruction’. These give both banks authority to transfer your money.
There’s little else that you need to do except wait for the process to complete. Your new provider will inform you once your account has been changed, and then you can start using it. All of your automatic payments will be switched, and any payments coming into your old account will be redirected to your new one.
If you have an overdraft, this can also be transferred over. However, banks have different terms and conditions surrounding how much you’ll be entitled to. Make sure you check this before you begin the process.
What Happens After I Switch?
Once the switch is complete, everything should progress as normal. However, if for any reason there are problems with payments as a result of the process, your new bank will be responsible for them. The Current Account Switch Guarantee means that any interest paid or lost will be refunded by them.
Your old account will be closed after the transfer is finalised. All of your regular payments will have been rerouted to your new provider. You can continue using your new account without issue.