/ Money

When the next best bank account comes along, I’ll be off!

Goodbye

Changing bank accounts doesn’t come naturally to me – I’ve only done it twice in 25 years. But I’m now prepared to move banks 20 times in the next 20 years if I see the need.

The reason for my change of heart is the new Current Account Switch Service, which guarantees to move your account and all linked payments, within seven days. I’ve used it, it worked for me and I’ll use it again.

Until the service arrived last September, I was a loyal and lazy banking consumer.

But when a government-backed service claims to do everything for you in seven working days, and ensures any payments that go astray for 13 months will be redirected, it has to be worth a try.

So I spent 10 minutes filling in an online application form and wandered off to enjoy a weekend. Seven working days later, a text arrived, saying my switch was complete.

My old bank account was automatically closed, and all my payments transferred over without a problem. I can no longer see why anyone would stay with a bank that wasn’t giving them the best possible account for their needs.

Seven working days to switch

The switching service has its drawbacks; it doesn’t let you compare accounts on price – which is particularly important for those who regularly dip into authorised or unauthorised overdrawn.

Also, not all banks have the same processes for switching. Mine went through smoothly online, but others require phone conversations. And it can take more than seven working days to switch if you’re opening a new account; the seven-day guarantee only kicks in once the new account is open.

These flaws may explain why more people aren’t using it. In the switching service’s first eight months, to the end of April this year, about 650,000 accounts have been moved in this way. It’s around a 14% year-on-year increase, but the numbers are a fraction of the 49m UK bank accounts.

The TNS Current Account Switching Index, which is tracking the service, believes people may still be staying where they are because the alternatives aren’t attractive enough.

The companies that have benefitted are offering something different. Santander, which has a popular cashback account, has gained 22% of switched accounts, and Nationwide Building Society, which offers 5% interest, is consistently increasing switchers. So as banks, building societies and supermarkets, now including Tesco Bank put new current accounts on the market, there is every reason to see whether a switch would benefit you.

The more we switch, the more banks will have to respond to our needs. So I’ll be checking my account against new options regularly and if there’s a better option, I’ll be off.

Comments
Profile photo of malcolm r
Member

Will this switching facility attract the same criticisms as some other conversations have made?
1. It will disadvantage those who have not got access to the internet
2. Unless each bank account has a single number to show how much you will gain, we British will not be able to understand it (as we can’t apparently understand energy tariffs).
It could explain why so few people have moved. Or it could be either apathy or people might actually be satisfied with their existing bank account?
Sorry for the cynical start – to which I could add comparing bank accounts partly on the cost of unauthorised overdrafts is a curious measure. Taking money that is not yours, and that the bank has not agreed to lend you, does not seem a responsible way of dealing with your bank.

On a more positive note, for those with good reason to change accounts it is good that it can be done so quickly, and that your regular transactions will be protected.

Back to cynicism – I don’t think we get something for nothing, so I suspect carrots to attract us will have some downside. And changing regularly on a whim, just because it is easy and you might get a small short-term gain, is going to add a lot of unnecessary cost to the banking sector – ultimately to you and me.

Member
Wendy says:
30 June 2014

I am cynical. I no longer trust such promises. I have gone through switching processes 3 times (though not with this process). The first time all went fine, no hitches. Second time one direct debit instruction went awry and resulted in a default payment. Third time 3 direct debit instructions were not properly set up by the switching bank and payments were declined. Despite this last switch coming with a ‘switching guarantee ‘ – we’ll pay you if it goes wrong kind of thing, the bank just made excuses and refused to accept responsibility. I no longer believe in guarantees. And I would always want control over closure of the old account, not some automated service to do it for me.

Profile photo of Clint Kirk
Member

I don’t believe that the switching service is as good as that. Unless I’m mistaken, your standing orders and direct debits are switched automatically, but payments INTO the account still have to be switched manually. Ok, so you think that’s no big issue. You’ve told your employer about your new bank. Anything else? Oh yes, a month later, you realise you’d forgotten to tell TopCashBack but you’ve changed it just in time. How easy was that to miss? Anyway, you then sell a second-hand camera on eBay and get paid. Hold on, where’s your money gone? You forgot to tell Paypal about your new bank! And next month, you claim some expenses from work. Oh no, that payment’s disappeared, because expenses are refunded by a different system than your salary. Then the following month, your aunt sends you some money as a birthday present. To your closed account.

It goes on and on. I will only have confidence in switching once sort codes and account numbers become portable, just like mobile phone numbers.

Profile photo of
Member

I moved from Smile to the Coventry BS when the Co-op Bank lost the plot. The switching process was without issue. As I will only ever bank with a mutual I doubt I’ll be moving again anytime soon unless the Coventry sells out or does something else to annoy me.

Member
Wogilv says:
10 July 2014

I am in the process of changing accounts to Nationwide and sure enough they guaranteed it would take 7 days, but they never said when the 7 days would start, I received a mail the next day saying it would be 5 days before they took any action, so that’s how they get round the rules!!, and remember that’s working days so for u and me its nearly 2 & half weeks.