Switching Current Accounts – What are the options?
Thanks to legislation brought in in September 2013, switching current account providers is now easier than ever.
Historically, the current account market has been dominated by the big four – HSBC, Royal Bank of Scotland, Barclays and Lloyds Banking Group. Now though, there are a whole range of options readily available for you to choose from.
Find out what options you’ve got when it comes to switching, and how to take advantage of them, by reading this quick guide.
7-Day Switching Guarantee
The 7-day switching guarantee was introduced in 2013 in order to combat what was seen as a lack of competition within the banking sector.
A large proportion of customers tended to just stick with one current account for most of their life, something that was at least in part down to the long and complicated switching process.
Now that switching has been made both easy and quick, banks have been forced into a battle to make their current accounts more attractive, offering benefits for customers old and new alike. This is a battle that has benefitted customers to no end, both in terms of the products available and in terms of the ease with which they can be switched between.
The Switching Process
The switching process is now incredibly simple and can be summed up in three basic steps:
Choose a new account
First things first: you’ll want to pick a new account that suits your needs perfectly. This will involve working out exactly what you think you need your account for and whether or not you’ll benefit from things like free travel insurance or an interest-free overdraft facility.
Whichever type of current account you’re after, you should always make sure you shop around online if you want to get the best deals.
Fill in the forms
Next, you’ll have to get the details of your existing account to hand, and fill in two short forms:
- A Current Account Closure Instruction Form (this closes your old account)
- A Current Account Switch Agreement (this sets up the new account)
Pick a switching date
Once you’ve got the forms ready and filled in, just pick a switching date, inform the relevant parties and within 7 days, you’ll have your brand new current account set up and ready.
You’ll be able to keep using your old account throughout the switching process and once it’s all gone through, your balance, as well as any regular payments that go in or out of your account, will be transferred over to the new one. This will include things like your salary.
You’ll also benefit from 13 months of protection during which your old bank will be legally obligated to send any payments that accidentally get sent to your old account, to your new one.
There are a growing number of smaller, independent competitor banks and building societies in the UK at the moment. Thanks in part to the introduction of the 7-day switching guarantee making the process of changing provider much easier, these smaller banks are now a very viable alternative to the big four.
Groups like the Co-operative are also classed as ethical banks, meaning that the businesses they invest money in are carefully selected according to strict moral and ethical criteria.
Smaller banks are nowadays offering very competitive rates when compared to their bigger equivalents.
Head over to our current account comparison page to see what kind of interest rates and other benefits you could enjoy when you switch and start banking with one of these smaller groups.
In recent years, supermarkets have been becoming an ever more important player on the banking scene. Offering a range of financial products from current accounts to credit cards to mortgages, supermarkets are working hard to show themselves to be viable alternatives to bigger banks – and it’s working.
Compare current accounts with supermarkets by using Money Expert’s free account comparison service today.