Switching bank accounts to another provider is a great way to make some extra cash on the side, and it is so simple to do. If you’re not happy with the service that you receive from your current provider or your loyalty isn’t rewarded, then why should you stay with them? As with any service provider, it pays to always be on the lookout for a better deal.
WHY SHOULD I SWITCH BANK ACCOUNTS?
Financial regulation in the UK allows consumers to switch their bank accounts whenever they like, and banks are completely aware of this. As a result of this, they like to offer various incentives to encourage customers to switch to them. I have made over £500 from switching my bank account, and it is one of the easiest ways I have made extra income.
Switching current account allows you to take advantage of the most competitive rewards and interest rates on the market, and switching perks can include:
- A cash reward
- Discounts on shopping, leisure and travelling
- Cashback rewards
- Higher interest rates
- Lower overdraft fees
HOW DO I SWITCH BANK ACCOUNTS?
Most banks have agreed to use the new switching service, which takes just seven working days to switch you from your old bank account to the new account once it has been opened.
If you want to check which banks are participating, you can search by name here on the Current Account Switch Service website.
STEP 1: FIND THE BEST DEAL FOR YOU
The first step to switching your bank account is to find a current account that is best suited to your needs. All banks offer different incentives, however some banks require you to pay in a certain amount every month to comply with their terms and conditions.
STEP 2: APPLY FOR THE BANK ACCOUNT
Next, you’ll need to apply to the new provider, and upon applying you will be asked to provide two separate documents for proof of identify and proof of address, in order to adhere to strict money-laundering rules. You will then need to complete a ‘Current Account Switch Agreement’ form and a ‘Current Account Closure Instruction form, provided by your new bank or building society.
STEP 3: AGREE A SWITCH DATE
You will be able to agree a switch date that is convenient for both you and your new bank, however it can’t be a Saturday, Sunday or bank holiday, and must be at least seven working days after your account has been opened. Once you have agreed on a date, your new bank will give you confirmation that the switching process has begun, and it will be completed on the agreed switch date. You can continue using your old current account up until the agreed switch date.
STEP 4: START USING YOUR NEW BANK ACCOUNT
On the switch date, your new bank will be responsible for transferring all your outgoing payments, such as direct debits and standing orders, as well as your incoming payments including salary and any other incomes. They will also transfer your balance to your new account, before closing the old account and confirming to you that the process has been completed.
The switching service is completely free to use, and for the first 36 months, your new bank will arrange for payments that have been accidentally made to your old account to be automatically redirected to your new account. Your new bank will also contact the sender to give them your new account details.
THINGS YOU SHOULD CONSIDER BEFORE YOU MAKE THE SWITCH
- Switching accounts can have an impact on your credit score. Your credit score may drop in cases where your application to a bank provider has been rejected or you have tried opening numerous new accounts.
- Having an overdraft with your current provider will not stop you from switching, however you’ll need to pay off any debt you have with your old bank. Although some banks may consider taking your existing overdraft on, but you will need to have an authorised overdraft with a record of managing it well.
- Your previous transactions will disappear once you switch accounts so it’s best to back up any statements beforehand