During very recent times, when interest rates were low, it hardly seemed worth switching accounts. However, recent months have seen interest rates rise significantly. Although they are falling back a little, there are still quite a number of accounts paying 5% or more. According to the latest reliable figures some 114,000 people switched their current account in the first six months of 2023 alone. If you’re wondering whether to switch your current account or not read our tips on what to look for and how to go about it with as little stress as possible.
Why Switch Your Current Account?
Most people give as their two main reasons for wanting to switch bank accounts:
- Dissatisfaction with the service from their current bank, either from low interest rates or inaccessibility
- Interest rates, special offers such as cashback or discounts on shopping and better customer service available elsewhere
It’s important to weigh up the pros and cons of switching banks before you jump. Look at things such as its accessibility for you. Does its banking app suit your requirements, for instance? If you are currently overdrawn will your new provider offer you the same deal as your current bank? If not, you need to consider whether you can pay off your overdraft before the switch. Make sure your new bank is offering attractive interest rates which won’t disappear after a short time, or perhaps a cash bonus to switch. Also look at whether you are required to pay in a set amount every month or switch a number of direct debits to the new account. Failing to meet the required criteria may disqualify you from any perks or favourable interest rate.
How Does Switching Work?
With the current account switch service (CASS) the process should be simple and stress-free. You should make sure the bank you want to switch to is registered with the service. Then follow these simple steps:
- Open a new account with your chosen new provider
- Choose the date you want to make the switch
- Seven working days before the switch date your new provider will set up your new account. Do not set up any payments before you are notified that your new account is ready.
- All incoming payments such as salary, benefits, direct debits etc will automatically be switched to your new account. Any payments due to your old account will be redirected.
- If you find that you lose interest or incur any charges because of the switch your new bank should refund you. Make sure you keep an eye on your transactions initially and contact your new bank if you think this has applied to you
Can You Switch Multiple Times?
There’s nothing to stop you doing this, but beware of any effect on your credit score. Switching your bank account will not necessarily have a detrimental effect on your credit score. However, bear in mind that applying for several accounts in a short time may impact your credit score. So too could exceeding your overdraft limit.