How to Switch Your Current Account

• Guides
• Published: 16 Oct 2008 in Money and Current Accounts

Old habits certainly die hard, don’t they? For many of us, there‘s a kind of inertia when it comes to banking. At an early age, we choose a high street bank – probably on no firmer basis than it’s the one our father used – and feel tied to it for the rest of our lives. We seem to accept whatever level of service the bank metes out to us; pay whatever charges are levied; and seem curiously grateful for the smallest rate of interest any time we’re in credit.

We seem very slow in waking up to the fact that the world has moved on. Like any market in today’s world, banking is fiercely competitive. Costs and prices rule. You’ll receive precious little in return from any misplaced sense of “loyalty” to the bank that has had charge of your finances for many years. So, whether it’s your dissatisfaction with the service, the cost of borrowing or the poor rate of return on your credit balances, it could be time to switch your current account from one bank to another.

Purpose-built “switching services”

If that is the case, you’ll find that the fast-moving world of financial services is already one step ahead of you. Switching your current account has never been easier. Indeed, since every bank will be hungrier than ever for your new business, they now offer purpose-built “switching services” which will take care of everything for you. This makes switching hassle-free, convenient and safe in the knowledge that all of the regular payments into and out of your account will continue to be made when the accounts are switched.

If your present bank is signed up to the banking code (which it is almost certain to be), it will be obliged to give your chosen new bank all your account details, including any Bankers’ Automated Clearing System (BACS) payments into the account (most likely to include your monthly salary) and regular outgoings such as Direct Debits and standing orders. That way, the switch is made as painlessly and as securely as possible, without your worrying about missed receipts or payments. Your day-to-day finances should continue as seamlessly as before the switch.

Since banks are obliged to cooperate with each other under the banking code of practice, most will use a switching service to manage the switch for you and, so, relieve you of much of the form-filling and cancellation and renewal of standing orders and Direct Debits.

What you’ll need

Bear in mind, however, that you’ll still need to satisfy certain criteria before a new bank can accept your business. These basic conditions include a minimum age, access to the internet (if you want online banking), a credit history, residence in the UK, and a regular source of income (for example, your monthly salary). Your new bank will also need your existing current account details and two forms of identity – one with photographic proof of your identity, the other showing proof of your address.

While switching current accounts has been made simplicity itself, the timing of any switch is important. It’s probably not a wise move to make immediately before seeking a loan. The credit assessment made when you want a loan is likely to take into account the time you’ve had a bank account, together with the time you’ve lived at your present address and worked for your current employer. In other words, the time you’ve spent managing the same bank account might help convince the lender of your financial stability.

When planning to switch current accounts

• Review the deal offered by your present bank and switch if you can get a better one elsewhere
• Whenever possible, use the switching service offered by your new bank to ensure a hassle-free and seamless transfer of all your day-to-day transactions

Give some thought to the timing of when it’s best to switch accounts.