You may be comfortable with your current bank account, but there are tonnes of reasons why it might be beneficial to switch bank accounts.
Read through this guide and then spend some time investigating whether switching accounts is the right thing for you and your finances.
Why Should I Switch Bank Accounts?
If you like rewards, lower overdraft fees, and cashback, then it could be in your best interest to switch bank accounts.
Let’s take a look at some of the benefits of switching bank accounts.
1. A Cash Reward
Some banks will give you a cash reward as an incentive to switch. Just like Halifax announced this week. They’re offering a £100 bonus to customers that sign up for their Reward Current Account.
2. Lower Fees And Monthly Charges
You can also save money each month by shopping around for a bank that offers lower fees or monthly charges. If you’re often charged a fee for going over your overdraft limit, this could be especially important for you.
3. Cashback Or Rewards On Your Spending
Some banks will offer ongoing cashback for your spending. For example, Santander offers an account with a 1-3% cashback on all your bills! A neat little way to reduce your monthly costs.
4. Better Customer Service
Another reason you may want to switch bank accounts is that you’re not happy with the customer service. Although this may not save you any money, it could certainly save you time (and stress).
5. Better Interest Rates
Interest rates are pretty poor across the board at the moment, but it’s still worth checking if there is a better deal out there. Look for an account with a high-interest rate, and get your money working for you.
How Do I Switch Bank Accounts?
There are two ways you can switch bank accounts. You can either completely close your old account and move all the payments to a new account. Or, you can do a partial switch and only move over some of your payments.
Step 1 – Choose A New Current Account
Shop around for the best account for you and your current financial situation. Think about whether you can get an account with a cheaper overdraft, better interest rates, more rewards etc.
Step 2 – Apply For A New Account
The next step is applying for the account you want. Most banks let you apply for new bank accounts online, over the phone, or in person.
You’ll need to fill out an application form. You may also be asked to complete a current account switch agreement and a current account closure agreement. This is the service that automatically transfers all payment agreements to a new account.
These forms are the bank’s way of getting your personal details and old account information. It is therefore super important that before you apply for a new account, you make sure details such as your address, date of birth, and surname are up to date. If you do not do this, the bank switching process can be delayed.
Step 3 – Choose A Switch Date
You can choose which date you’d like to make the switch, however you must choose a working day at least 7 days ahead.
It’s also a good idea to choose a date when you know there aren’t any direct debits planned to come out. To be safe, leave a few days between any outgoing payments and switching.
While you’re waiting for your account to switch, it’s also worth avoiding setting up any new direct debits, or payments, from the old account.
Step 4 – Leave The Rest To The Banks
Your part in the switching process ends here – simple right?!
Your new bank should now be in talks with your old bank, transferring any necessary details to each other. They will then confirm the switch date, let your employer know your new bank details, and move any direct debits to your new account.
If you have monthly payments due from your account, it’s worth checking what date you expect these to be paid. When you have your new account, make sure all your direct debits have been successfully moved over.
Account Switching FAQs:
What If I’m In My Overdraft?
You should still be able to switch accounts if you’re in your overdraft. You just need to pay off any debts with your previous bank. Some banks might let you keep the account open to pay off your overdraft gradually. Although they might also insist you clear the debt before you switch.
Can I Switch A Joint Account?
As long as both people agree to switch accounts, and the new account is under the same names, you should have no problem switching a joint account.
Do I Have To Close My Old Account?
If you switch using the Current Account Switch Service then your bank account will close. There is an option to do a partial switch, but this often takes longer and may mean you don’t receive all the incentives offered with a full switch.
Does Switching Impact My Credit Score?
Your credit score can be affected in the short term if you apply for many accounts. If you’re applying for a mortgage, loan, or anything where your credit score is important, it may be better to hold off switching accounts.
Is There A Limit To How Often I Can Switch?
There is no limit to the amount of times you can switch accounts. In fact, some people make quite a lot of money from this by switching to get the bonus rewards.
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