Your current account is the centre of your banking, the place where your wages get paid and day to day transactions take place. Yet most of us don’t consider switching banks in the same way as a phone contract or utility bill. We show you why you should.
Competition for you current account is fierce. In fact banks are so desperate to get you to switch your account that some are offering bonus interest rates or even paying you cash if you move.
The majority of high street banks also have dedicated switching services to take the hassle out of moving. So given that it’s easier than ever before to move let’s take a look at what you need to consider before you do.
What do you have now?
Firstly it’s important to establish exactly what you have at present as there are a wide range of current accounts in the market place all offering a variety of services and charging different fees for the privilege.
You need to know exactly what you’re getting from yours so that you can accurately compare it to the others on offer – and better it! Do you know what your overdraft rate is or if the bank pays you anything for holding a balance in the account? Are you paying the bank a subscription for your account? And if so what are the benefits you get with it and more importantly are you using them? Are you earning interest on in-credit balances?
Check your current account provider’s website, your latest bank statements or a recent copy of your ts and cs to find the information you need.
How do you use your current account?
By moving your current account you are shifting the heart of your banking. So it is worth considering exactly what type of service you need from your new bank.
Do you want to bank in branch, or are you happy with an online-only option? Do you need a cheque book? What about a sweeping service or mobile banking?
Also check your statements to see how you use the account: do you consistently hold a large balance or do you struggle to escape your overdraft on a monthly basis? Establishing how you use your account will help you prioritise your needs.
What else is out there?
Once you have established what your priorities are you can start to shop around for a current account suited to your needs. If you use a substantial overdraft you should look at the rates and charges other banks apply compared to your existing account to see which will help you cut the cost of your borrowing.
Alternatively if you hold a reasonably large balance in your current account at some point in the month you should see which account will give you the best interest rate, or offer a reward for holding your money. Some accounts also offer a sweeping service which puts excess funds into a savings account until you need them, something that may help give you a better return on your money.
If you are paying for a package account but tend to use only 1 or 2 benefits there may be cheaper alternatives available which still include those select items. You may also want to consider opening a free account and then shop around for the extra benefits elsewhere.
Once you decide what you want from a new current account you can use our current account comparison tables and advanced search facility to find the accounts that match your needs and then compare them side by side to find the one that will be best for your banking.
The switching process
So if you’ve found a current account elsewhere which fits the bill how easy is it to relocate your banking?
The majority of the banks now offer an account switching service to make life easier for customers to move. Essentially they contact your old bank and arrange the transfer of all your direct debits and standing orders to your new account, saving you the hassle of ringing them all yourself.
All you will need to do is apply for the current account that has taken your fancy either online or in branch. Once it’s open, simply give the details of your old account to the bank’s switching team and sign some paperwork telling them exactly what you want to move over.
Once this is done they can start moving everything over for you. This process usually takes between 2-4 weeks to complete depending on how many direct debits you have etc.
So is there anything left for me to do?
While the switching process has made things easier there are a couple of things which they can’t move on your behalf.
The first and perhaps most important is credits coming into your old account. You will need to give your new account details to anyone who pays money to you directly, such as your employer or government benefits agency.
Secondly they may not be able to actually close your old account. Sometimes you will have to write to your old bank to close it or pop into a branch and sign some paper work. You may also decide to keep the account open for a couple of months until you are happy everything is running smoothly.
There is little doubt that looking at the current accounts on offer from other banks is a way of saving some money, after all most people now shop around for credit cards or savings accounts so why not do the same with your current account as well?
