If you’ve had the same current account for years it might be a good idea to change to a different bank as switching could have many benefits and is definitely worth considering.
Some of the reasons for doing so might be to secure a higher interest rate on any savings, getting a better overdraft rate, a better mobile app or for moving to a closer local branch.
It might seem like a hassle but switching a UK current account is much easier than it used to be. This is all thanks to the current account switch guarantee that is now in place.
In this guide we will talk through some of the reasons you might want to switch accounts, what the current account switch guarantee is and exactly how you need to go about getting this sorted as easily as possible.
About Current Accounts
A current account is a bank account that you use to manage your day to day cash. You will receive regular money into your current account, whether that be a wage from your job, benefits from the government or even a little side hustle you do. In addition to all the different kinds of money going into your current account, you probably have lots of money leaving it too.
This includes things like rent/mortgage payments, household bills and daily spending. Knowing what is coming in and out of your current account is important because this will help you decide what kind of account you can possibly switch to.
With your current account, you can do things like withdraw cash from an ATM, pay bills and so on. You can be rest assured that all the money in a current account is yours, which makes your current account debit completely different to a credit card.
There is also the possibility of an overdraft facility which will allow you to apply for more money than you actually have, working as a form on credit. Of course, you don’t have to have an overdraft feature on your current account but many banks will offer this to their customers who are in good standing as they are able to make money from the fees.
Really consider whether you do want an overdraft or not because you need to keep in mind that you will be paying a monthly fee on this. Also beware of going over your overdraft limit as your bank will impose hefty fees for doing this.
For many people, once they are into their overdraft, they struggle to get out of it on a monthly basis so it’s best to avoid using if possible and just saving it for emergencies.
Now that we’ve covered what a current account is, let’s talk about possible reasons to switch and how to switch current account.
Current Account Switch Guarantee
The current account switch guarantee is something that has been put in place in the United Kingdom in recent years to make switching your current account a much more appealing option, and also much easier than it used to be.
It basically requires the financial institution to do all the hard work for you within seven days of you making the application.
Remember that a bank wants YOUR custom so they are willing to do everything required to secure your trust and loyalty. Some of the benefits of switching your current account are as follows.
- Many banks will offer an incentive to signing up to them rather than with the other competition on the market, this could include a gift card or even cash.
- There might be cheaper overdraft fees or less fees in general from one bank to another. This could save you a lot of money if you are one of those people who constantly dip into your overdraft.
- The mortgage facilities might be more appealing. This is vital if you are looking to purchase your own home in the near future.
- The interest rates could be higher, giving you more of a return on your money. It is no secret that the interest banks offer has drastically gone down in recent years but every little helps and if you are holding a decent amount, this all adds up.
- Certain retailers could be paired up with a particular bank and offer cashback or other rewards so this is worth researching.
While all banks might seem the same, they have subtle differences that are worth looking into. The benefits are definitely there and if any of them apply to you, what are you waiting for?
Below you can find how to switch current account and fully utilize the current account switch guarantee.
What to Do First
You will of course need to research first and decide what bank you want to switch to. The benefits and also the interest rates change in banks from year to year. While one might be the most appealing one year, this could soon change so it’s important that you know exactly what you want and what you will be getting out of becoming a member.
Don’t be afraid to book a meeting with different banks and talk to an adviser to see what they can offer you.
So what is the right way to find the best bank in 2019 and beyond? Comparison tools online actually make this a much easier than what it used to be so consider going down this route.
Banks offer different incentives in order to fight for you as a customer so research what is hot right now and go from there.
It’s important that you are 100% satisfied with your decision of which bank to choose before you go through with the switch.
Acquiring Your New Bank Account
Before you actually do the switch, you need to apply for a new bank account. This is usually a pretty straightforward procedure but there is sometimes criteria that you need to meet and you will also need to show certain documents in order to verify your identity.
As a UK resident, the documents you will need in most banks in order to open an account are as follows.
- General Identification – This is to show proof of your name and can consist of a passport, drivers license, a UK armed forces card or a Northern Ireland Voters card.
- Proof of address – Most banks will require proof of address from the last three years. This can include a drivers license with both sections complete, a utility bill, a tenancy agreement, a letter from HMRC, a bank statement or anything similar to these that have your address on. If you’ve moved house in the last three years, you will also need proof of your own residency.
- Proof of income – To do a current account switch, most banks require that you have a certain amount of in-goings each month to your account. This proof could be a letter from your employer, your contract from work or previous bank statements which are still fairly recent.
If you want to switch a joint account with a partner, you will both need to provide these documents so that the switch can go ahead successfully and without delay.
The Seven Day Switch
Once you’ve got all the mentioned paperwork together, it’s time to do the switch or get in touch with the new bank so they can do it for you. You can usually do this in branch or online depending on the bank in question.
The current account switch guarantee promises that the entire process from start to end will not take more than seven working days.
Once you’ve been accepted for your new current account (and the one you want to switch to), it’s time to move on to the next step.
You’ll then be asked to fill in a current account switch agreement where you will need to fill in the details of your old account, in addition to some other pretty basic details. Your new bank will need the details of your old account so that they can redirect any standing orders, direct debits.etc. to them. That’s right, you don’t even need to contact any of your utility suppliers, which makes it a much more convenient option.
You can choose when you want the switch to take place, which can be on the seven day deadline or any time beyond that. If you want to close your account, you will also need to fill in another form to put this into action.
Once all the paperwork is done, your new bank account will be open and the switch will take place in 7 days or on the date that you requested on the form.
As promised, your new bank will do all the hard work for you. They will inform everybody who needs to be told about the current about switch. This includes your employer or any other company that regularly pays money into your account.
You will receive all the information in the post that you need to have for your new bank (i.e. sort code, account number, online banking details, bank card and so on.) Of course, you can carry on using your old bank account until everything goes through with no problems.
Having a new bank account is pretty exciting so when you have confirmation that the switch has been completed, be sure to open up the banking app and check out your new financial platform. Be sure to also download your new banks mobile app if you like to bank this way.
There are so many different banks out there and you should not be left with a bank that fails to deliver or just doesn’t live up to its promises. Don’t just stick with a bank just because you have been a customer for years, sometimes the grass IS greener on the other side.
Hopefully after all the information that has been provided in this article, you now know how to switch current account with ease. If your new account proves to be a flop too, you can always switch to another bank using the exact same method!