Most of us open a current account and rarely opt to switch to another provider. Why? Because it can seem like a hassle to reorganise direct debit payments and standing orders, and there is an assumption that there is little difference between one current account and the next.
What is a current account?
A current account offers somewhere to stash your day-to-day money and usually comes with a cash card and chequebook. Most current accounts enable BACS payments, so you can receive money transfers into your account and most also offer overdraft facilities. But, current accounts also allow you to earn interest, which is why it’s important to make sure you’ve got the best current account for you.
Why switch?
Simply, to make money: Switching current accounts can make you money because banks will pay you interest if you’re in credit but importantly, they also often offer an incentive to switch in the form of a lump-sum payment. Other reasons to switch of course include bad customer service.
How to select a current account
Before you compare current accounts, make sure you understand what kind of bank account user you are. For example, are you always in credit, always overdrawn or do you fall into both categories during the course of any given month? Look at your bank statements to work out the answer and then compare current accounts that match your needs.
If you want to know more about how to find the best current account for you, read this guide.
How to switch your current account
After you’ve applied for the current account you want, the switching process is pretty simple because most banks offer a dedicated switching service and do all the hard work for you.
What you need to do
You will need to provide your existing bank account details, two forms of identification and will be asked to sign a document to give your new bank permission to obtain details of all your direct debits and standards orders paid out of your existing account. Your current bank is obliged to give your new chosen bank this information within three working days of receiving a request for it.
What next?
Once the new bank has received these details, you will be asked to check the accuracy and ensure that only active payments are transferred. Remember to notify your employer and others who make payments into your current account.
Should I close my old account?
That is completely up to you but it may be worth keeping it open for a few weeks until the switching process is complete.
A safeguard to look out for
When switching current accounts, most banks offer a free overdraft until the changeover is complete, so make sure the current account you select has this feature as it will give you peace of mind that all payments have switched over smoothly.
