Skip to main content Accessibility Statement
man using cashpoint

Bank branch closing? Why switching bank is easier than you think

With at least 500 bank branches expected to close this year, you might be thinking about switching bank. Worried it'll be too much hassle? Well, the 1.2million people who used a switching service in 2014 might tell you it’s easier than it appears.

Banks and building societies all now offer a free seven-day Current Account Switch Service. It’s backed by a guarantee that means you’ll be refunded any interest and charges on your old and new accounts if anything goes wrong.

The guarantee allows you to move your account to a new provider within seven days instead of 30. The Payments Council says 2014 saw a 12% rise in the number of people changing their bank account through the service. 

How to switch your current account 

Here’s how the switching service works:

  • Once you’ve chosen a new account, the new bank or building society will ask you to fill in two forms: a current account switch agreement and an instruction to close your old account. 
  • This has to be at least seven working days after your new account is opened. 
  • All your incoming and outgoing payments will be moved to your new account. 
  • You can carry on using your old account up until the day of the switch. Your old account will then be closed. 

For 36 months any payments into or out of your old account will be automatically redirected to your new account. However, recurring payments, such as a gym membership or payday loan, which uses debit card details, are not part of the guarantee. So if you switch bank accounts, you will need to tell these firms your new card details.

 

Comparing the competition

There's a battle between the banks at the moment to get your business, and many are offering an incentive to join them. You could get a switching bonus of around £100, interest as high as 5% or cashback on bills and day to day purchases.

Another reason people change bank accounts is to avoid fees, charges and overdraft costs, which can vary. One of the highest fees is normally for busting your agreed overdraft limit, so if you regularly spend more than you have in your account it pays to choose one which gives you an overdraft up to an agreed limit without charging fees, and/or a low interest rate. 

Here are some of the other common accounts:

  • Basic accounts are available to people with poorer credit ratings, usually with a simple cash card.
  • Standard accounts are usually more flexible and come with a debit card and overdraft options.
  • Packaged accounts can offer a range of services for an additional monthly fee. These can include things like mobile phone insurance or car breakdown cover.
  • Jam jar accounts are becoming more common - sometimes called budgeting accounts or rent accounts, they let you divide your money into different 'pots' or 'jars'. 

 

* Article updated on April 30 2015 to show the time a switched account is redirected was increased from 13 to 36 months.

What do you think?

We really want you to share your views, but please remember to be nice ☺
All fields are required. Check out our full commenting guidelines

By clicking on 'Post Comment', you're agreeing to our Commenting Policy