Could you save money by switching your current account?

Money 2 years ago
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People in the UK stay with their banks for an average of 17 years. That’s longer than the average marriage (which lasts just 11 years) and it could be costing you money. It takes just seven days to change banks, so why switch?

There’s plenty of reason to switch, not least because if enough people do so, it’ll keep the banks on their toes, forcing them to offer customers better deals and service.
And the banks want you to move. Plenty are offering incentives to switch, from cash to shopping vouchers.

Think about your needs

Before allowing yourself to be swayed by cashback deals or one-off payments, you’ll need to sit down and work out exactly what each bank is offering and how it will benefit you.
Some banks, for instance, won’t offer you a cash incentive to join, but will pay interest on your balance. If you’ve a large sum of money, this will be much more worthwhile.
Similarly other accounts offer good deals but apply conditions, such as making you pay in a certain amount every month. If you’re a freelancer, retired, or without a job, this might not work for you.
Check out websites like Which? to find out which accounts come recommended.

Are you a good customer?

You’ll need to work out what kind of customer you are. Do you have lots of savings, or are you always overdrawn? If you’re overdrawn, you can still switch, but you’ll need to speak to the different banks to see what each one can offer you.

How to switch bank accounts

Step 1: Apply to your new bank

Step 2: Once you’ve been accepted, fill in a Current Account Switch Agreement form and a Current Account Information form.

Step 3: Choose a switch date and agree it with your new bank. This must be at least 7 working days after you’ve opened the account.

Step 4: Continue using your old bank account as normal.

Step 5: On the switch date, check that your new bank has moved all your money and payments, and closed your old account. Your new bank should do all this for you.

What if something goes wrong?

Don’t panic. The Current Account Switch Guarantee means that your new bank must repay any interest or pay any charges you incur if the switch doesn’t go to plan.

And don’t worry if any payments are accidentally made to your old account. For 13 months they’ll be automatically redirected to your new one.

Certainly if you’ve been with your bank for more years than you care to remember, it’s worth checking what options are out there. You could bag yourself a much better deal.

Hitachi Hints and Tips is intended to be informative and interesting. It does not constitute financial advice, and you should always do further research when making any financial decisions. All information was correct at date of publication.
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