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How to switch a bank account in three simple steps

16 May 2022

Switching a bank account is easier than you might expect, so there is nothing holding you back from chasing a better interest rate or level of customer service. We look at the steps you need to take to switch your current account to a new bank.

A lady switches her bank account online

There’s something about switching financial products that just seems like too much hassle - especially when it comes to current accounts.

Official figures show that the number of people switching banks is still pretty low despite rules introduced by the financial regulator in 2013 that made it much simpler to move a current account from one bank or building society to another. In fact, the numbers show that the amount of people switching each year has dropped from 1.16 million in 2014 to 650,000 in 2021.

In the past, potential switchers had been put off by concerns that the changeover would take too long or that important payments, such as mortgages, would be missed if the transfer did not run smoothly, but the 2013 change in regulations mean that you should be able to complete the switch within seven working days, and that the changeover should take place on the day of your choosing.

The guarantee also states that standing orders and direct debits will be automatically moved across and that any payments made to or requested from your old account in error will be transferred to the new one for 13 months after the switch.

Finally, if you encounter any problems, such as missed payments as a result of the switch, your new bank will be responsible for refunding you any lost interest or late-payment charges.

While the bank takes care of your switch, your job is to choose a new account if you’re not happy with your own bank. Many have suffered poor customer service or simply object that no interest is paid at all. The Competition and Markets Authority (CMA) estimates some customers are losing out on £92 a year as a result of being with the wrong current account provider.

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Step 1: Choose your new bank

The first step in making a switch is to choose the bank you want to switch to. A new provider could offer a number of advantages or inducements, such as:

  • A higher level of interest on credit balances
  • Lower overdraft charges or interest rates, or a different way of charging for overdrafts that could save you money
  • Better customer service
  • A cash incentive for switching

Step 2: Open your new account

You should contact the bank you want to move to and arrange to open a new account. Tell them you want to move your current account from your existing provider, and the new bank will confirm they will use the Current Account Switch Service which is backed by the Current Account Switch Guarantee as described above.

Step 3: Make the switch

When your new account is open, you can make the switch. This involves completing a Current Account Switch Agreement form and a Current Account Closure Instruction form for your old bank.

You can choose a switch date with your new bank, but this must be at least seven working days after the opening of your new account.

Your new bank will let you know when the switch has started and confirm the date it will be completed. Your old account will be available for use as normal, right up until the switch date.

On this date your money will be moved over, as will all of your regular payments, and your old account will be closed.

Switching your ISA

It’s not just current accounts that have their own switching service, you can also transfer your ISA to a new bank or a different product with your existing provider. This has to be done via the bank and not carried out yourself because withdrawing money from an ISA and then paying it into another ISA will count towards your allowance.

ISAs can be transferred at any time, although you may face early termination charges with some products, a fixed rate period or notice account, for example.

When looking for a new home for your money, make sure that the new provider allows you to 'transfer in', which means that you can transfer money from previous ISA years. Some opt just to take 'new' money.

To keep the tax free status you will need to complete an ISA transfer form which gives all the relevant account numbers of where the money is moving from, as well as your permission to move it.

Cash ISA transfers should take no longer than 15 working days, while other ISAs could take up to 30 working days.

Read our guide to ISAs

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The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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