/ Money

Stop dawdling, switch bank accounts

Truck moving coins

It’s surprising how few people switch their current accounts despite being unhappy with their bank. What is it that’s holding us back? Is it just us being lazy, or is the process not as hassle free as it should be?

I’m unhappy with my bank. I know all the options for switching. I know I should switch bank accounts. Have I? Erm…

One of my New Year’s resolutions was to switch my current account provider. Some companies’ customer services are head and shoulders above the rest, and others offer much better deals on overdrafts.

So, I did a bit of research, looked at all of the options and worked out the best account for me. And yet… I’m still with the same bank.

Why haven’t I switched banks?

If I, someone who spends time working on these issues, haven’t switched bank accounts, what chance is there that anyone else will? And if few people ever switch, why would the banks ever try to improve their service – where’s the incentive?

I’ve had a bit of a think about this and there are a few reasons why I haven’t switched:

  • There are generally more interesting ways to spend your spare time than being on the phone with the bank or queuing in a branch.
  • There’s a part of me that worries about a direct debit going astray, such as my rent not going in, or my phone bill not getting paid. And what will that lead to? More time on hold to a call centre.
  • And finally, you don’t always do what’s best for you, despite knowing you should. If I did, I would be going for a run every morning before work. And I’m no Seb Coe.

Of course, I know the answer to this problem – make some time and simply switch. And I’m (reasonably) confident that this will happen in the not-too-distant future.

Switching needs to be hassle free

I know my reasons for not changing my bank account aren’t exactly bulletproof. The notion of ‘disappearing direct debits’ may even be an urban myth. How hard can it really be to transfer a list of instructions!?

However, if we want to create a competitive retail banking industry where companies really fight for your business, how do we create an environment whereby switching is easy, common and hassle free?

Maybe I’m just a bit lazy and everyone else out there is constantly switching to the best deal, but I have a hunch I’m not so different from everyone else. Is anything holding you back from switching bank accounts?

Natalie says:
23 February 2011

I have recently had the most horrendous experience trying to switch from First Direct to Cahoot. It took in excess of 3 months, I had to resort to getting FD to send ME the SOs/DDs and then me sending these to Cahoot and eventually Cahoot told me they couldn’t import my DDs due to a system incompatibility.

I eventually gave up and stayed with FD!

(Previously, I have successfully switched with relatively little hassle but this last experience has totally put me off!)

I switched over Christmas (probably not the best of times) from RBS to The Co-op, to avoid being ‘sold off’ to Santander. The forms were filled in at my local Britannia branch (now part of the Co-op), but despite me explaining that my current and savings account were linked they made no reference to the savings account. They also supplied me with the wrong account number!

My current account along with direct debits, standing orders etc were switched to the Co-op but most of my money remained with RBS in the savings account, which was now inaccessible as my debit card had been cancelled, so I couldn’t set up a payment to move it.

Telephone banking couldn’t help and my branch could only offer the option of withdrawing the whole lot in cash (no cheques) if I went in person with a passport or driving license, neither of which I have.

The Co-op offered a free overdraft facility which I had to use and I also had to transfer money from another savings account because I’ve never been happy about being overdrawn.

I found a complaints department for RBS down in Borehamwood and to give them their due they sorted the situation within a week. But the whole process took over a month and was more hassle than when I last switched over 25 years ago.

If I were to switch again I’d do it manually so that I knew where everything was.

I am in this club and thought I may as well share how I am currently enduring the switch of A&L to Santander – Their latest trick is to start charging me £5 per month due to underfunding the account – which of course is incorrect as I have my salary paid direct into it – Never been a problem until Santander took over – spoke to them today and apparently the money needs to hit the account between 22-28th of the month (I get paid every 4 weeks so salary date varies over the year) – advisor told me to transfer money out to another account and then back in on the 22nd – crazy waste of time. Plus the fact they cant do faster payments consistently and are significantly raising their overdraft charges it really is time to move on.

I should also add I have done the switch a few times although I tend to keep my old accounts active – Halifax were terrible and completely screwed up the transfer – they ended up paying me compensation before I closed the account a month after opening A&L did the transfer very well and were good up until Santander took them over. HSBC have always offered me the best service and is the best internet banking I have seen so far – Would be interested in where to go to next…

I’ve just switched from Santander to Barclays and no problems so far. My advice is to change direct debits yourself and keep both accounts open in order to access both on line. Some direct debits can take 2 weeks to process, so change from the old to the new the day after a payment has been made from the old account.
My reason for switching is that a debit card is not available with a Santander basic bank account, but is with a Barclays current account, and their on line banking web site is excellent

I’ve never actually switched bank accounts. I’ve changed accounts – twice. Then moved all the direct debits and standing orders over. I’ve never quite trusted them to get it right switching. When my husband switched his account at the end of last year (on my insistance that he get a ‘better’ account), he switched. And two lots of standings orders didn’t go through; including the one into our joint account for rent and bills. Luckily we had enough money in our joint account at the time to pay the rent (that was an usual moment), but if we hadn’t, we’d have probably been hit with fees and charges.

I have no intentions to switch current at this time as I’m generally happy with them, and they’re much of a muchness in terms of interest. If I change my mind I’m not sure I’d do an official switch though.

Not trying to discourage you!

I switched from Barclays to Smile some time ago, and have never looked back. It was very easy – Smile did most of the work, and it only took a couple of weeks in total. Only word of advice I would give is, if you are in a position to do so, have enough money in both your old and new accounts to cover a month’s direct debits – as you never know exactly when these will switch.

I would highly recommend Smile. I wish more people would change banks – too many people put up with terrible service. If more people moved it would force the big banks to concentrate more on customer service, rather than boasting about their profits.

Gerard Phelan says:
28 February 2011

I’ll be forced into changing soon in order to avoid being sold to Santander. In my opinion Direct Debits and Standing Orders are the easy transfers. The hard ones are the saving accounts for which your bank current account is the ‘nominated account’ used to transfer to or from them and the other snag is the Share / Unit Trust managers who pay dividends directly into your bank account. You need to be extremely well organised to have every single one of these on a list, especially for long term savings accounts where there may be no transactions for some years.
Therefore I’ll probably keep the old account open with money in it but otherwise inactive for a year after the transfer, just in case.

Sophie Gilbert says:
3 March 2011

Apart from their despicable ethics, I haven’t had any problems with RBS in 26 years. I live in Scotland and I will switch to the Co-op Bank when they open more than one branch here!