How to Switch Bank Accounts

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Some people prefer not to switch bank accounts for the simple reason that the whole process appears a little daunting.

With payments such as wages coming in, and numerous bills and direct debits and standing orders going out, it is easy to think that ‘if it ain’t broke, don’t fix it’. If everything is running perfectly well already, why bother to switch bank accounts and throw everything into turmoil?

The answer is this: Because you may be able to save yourself some money, and the process of switching accounts is actually pretty painless.

Why Switch Bank Accounts?

Your circumstances or banking habits may have changed, making your current bank account unsuitable, and meaning the fees you are being charged to use your account have increased. Or you may simply be in the mood to review your current situation and see if there are any better options available. Although your own bank may offer a more suitable account, it is a good idea to review your options across the whole sector.

For some people, even thinking that they might switch bank accounts to a different bank gives them a sense of disloyalty. This is misguided. Some banks are notoriously blas© when dealing with their regular, long-standing customers, hitting them with outmoded fees, keeping them on old rates and denying them the special offers they are freely handing out to their new customers.

So why not become a new customer yourself? Why not switch bank accounts to a bank that is happy to reward you for making the move? Without doubt, the bank clerk at your existing bank will have many reasons that you should stay with them. They may even look a little misty-eyed, as though they will miss you walking through the door every day, despite the fact you’ve always done your banking online, have never seen them before and never will again. Be assured: when you switch bank accounts, the world does not grind to a halt. Your bills continue to be paid, and so do you.

Is Switching Going To Be A Good Move?

Banks are constantly changing their products and also the benefits of accounts, so it would pay to look at your present account and see if you can improve upon it by changing.

Do you need:

• Higher interest
• Lower fees
• Easier access
• Better service from the bank
• Better features

When you have assessed what will best suit your style of account use, check to see if you will save by switching bank accounts. Research the products of other banks.

Preparing For Your New Bank Account

It is not too difficult to set up a new bank account. You need to take in the necessary documents to give the bank the 100 points necessary to open an account and you are in business.

BUT what is important is that you make sure that any payments you have going into and out of your account automatically have been changed so that there is no interruption to that service. If the automatic transfer is for paying something it is very important because if certain accounts are not paid on time they will attract a penalty fee.

To make this easier ask the bank that you are leaving for a list of all your direct debits (bills paid by automatic payment) and direct credits (income by automatic payment) for the last 13 months. This way you will know everything that has gone in and out of your account automatically over the year and you can contact the necessary organisations to change your bank account numbers. It is good to have a list such as this because not all automatic transactions are on a monthly basis, like tax refunds for example, and can easily be forgotten.

Double check your own bank statements and make sure that you have no automatic payments going between your bank accounts at the same bank, like into a savings account or retirement account.

It’s the annual memberships and fees that could trip you up so make sure you check back for that past year.

The Process Of Switching Bank Accounts:

When a customer decides to switch bank accounts to a different bank, both banks are obliged to co-operate to make the process work quickly and efficiently. People tend to fret most about the regular payments they have set up on their account. Will these continue uninterrupted? There is no need to worry on this score, providing you follow a few simple steps:

• Once your new account is open, maintain enough funds in your old account to cover any automatic payments due during the switching period.
• Request a list of your regular direct debits and credits from your current bank.
• Once your new bank has this list, you will complete a ‘Switch of Financial Institution and Account Details’ form, which authorises your new bank to take over any regular debits and credits. Your new bank will then inform the relevant organisations, such as your employer and utility companies, of your new account details.
• It is advisable to keep your old account open with sufficient funds until you have seen that each debit and credit has been taken over by your new bank, especially if you switch bank accounts close to any credit or debit dates. Once you are sure everything has transferred, you can go ahead and close your old account.

The other option is to contact each organisation yourself to pass on your new details. However you choose to proceed, there is no reason why your desire to switch bank accounts should be hindered in any way. It is an easy process, and one you should strongly consider if your existing account is not exactly matched to your current requirements, or you suspect that switching bank accounts will end up saving you some money.

Which Bank Should I Switch To?

This largely depends on your individual circumstances, and will require some research on your part. The Internet is the obvious starting point for anyone wishing to switch bank accounts, because information is often gathered together on one site, where you can compare like-for-like accounts and see which one most closely matches your needs.

It is often mentioned that we live in the ‘disposable age’ and it usually refers to manufactured products like CD players, mobiles, cars, etc.

But did you know that it could almost be linked to credit cards and other bank products? It has become quite a common practice to switch to save money.

The fact remains that thanks to the finance companies and the Government it has now become quite feasible to change your accounts and end up with a much better deal than you had in the last instance. We always have so much to do in our busy lives, but it really does make a lot of sense to change your financial institution if you find one that is much more suited to your needs. All you have to do to start is go online and make the initial enquiries.

Once you know your spending pattern you can then evaluate the opportunities. When searching for the right bank for your use, start with these points:

1. Know what type of product you need.
2. Do some research and see what is on offer.
3. Do your sums and work out which is going to be best for you in the long run.
4. Talk to the financial institution you have chosen and get the best deal

What you are aiming to do is get a financial set up that is going to be cheaper for you to manage and easier for you to manage. That is usually the purpose of changing your accounts.

Know What Type Of Product You Need

It is time to start your research. Look at old statements and assess what you have been paying in fees. Are they same as when you opened your account? Sometimes they change if we have had the accounts for a number of years and sometimes new ones are added in. What does their current Product Disclosure Statement say about fees?

If there have been changes you may not have utilised them and saved yourself some money with the way you do your banking. If you are still considering changing banks see if there are exit fees if you close these particular accounts.

Are you on any special deals which include several accounts or services? If you are, check how this will affect you if you want to change a particular account or service. If you only want to change your transaction account but keep your loan account you may break a deal that you have where all your accounts are included.

Have you always been satisfied with the service you get with the bank you are with? Have your needs changed in any way since you opened your current accounts? If so, does your current provider have any better accounts that suit your current requirements?

Do Some Research And See What Is On Offer

Now that you understand your current banking needs it is time to search around and see if there is a better deal out there for you that is going to save you money.

This is not something you want to be doing every few months, so it pays not to jump into the first deal you see. Check out various options online and keep abreast of offers via the newspaper and from pamphlets you pick up at the banks.

Once you have a short list look at all their services more in depth, check out application fees, entry and exit fees, and any other set up costs that may be applicable.

By understanding your financial requirements and knowing the areas that you are not happy with, you will be able to research those areas in particular.

Do Your Sums

Before making a move, ensure that you are going to make a switch to save money not cost you money. In saying that, it is not always ‘all about the money’, sometimes it is the whole deal that will make the decision for you and that could include the various products and the services offered as well.

To compare the difference between your current situation and the proposed change, consider these factors:

• Features – look at these in depth as they could just be an initial offer, or a particular feature could be cheap, but other services that are more expensive by comparison. Understand exactly what features you need and what you will benefit from if you change
• Interest, fees and charges – this will probably be where you will get the biggest differences and again, it will depend on how you will use the products as to what will benefit you most. Take into account: annual interest rates, application fees, all penalty fees, counter-service fees, statement fees, online fees, basic account fees, overdrawn fees and any others that you come across
• Conditions of service – various institutions will charge for some services where others do not. Check out any possible charges that you may incur
• Service Guarantee – are there service guarantees or have you heard from friends about the particular provider that you are assessing

There may reach a point when you feel quite confused about what is being offered to you but refer back to your notes about how you will use the services of any financial provider and cross out any providers that do not offer the best services for what you currently need. That will help you make a short list.

From that point you can look at the $ value in any switch to save money or you can look at the services that may be better than you receive now.

As part of the services of any new bank that you may switch to, see if they help you make the switch. They are experienced in these matters and should be able to make the switch as painless as possible for you.

If you decide not to make the switch, then at least you have experienced the exercise because it is something that should be done every 18 – 24 months. Keep the information you have gathered and it will help you next time around.

Talk To The Financial Institution And Get The Best Deal

Now is the time to do something about that short list. You have read what is being offered, but did you realise that when you go and sit down with a financial representative they may be able to offer you an even better deal than what you have been looking at?

Banks want your business.

Before you go and visit a financial institution, have a list of questions made up that relate to your banking needs, so that you can ask the same questions to the different ones and thereby compare on an equal basis.

Take with you, or at least know what the offers are at the particular provider you are visiting.

Once you have visited a few, go back to your own bank if you like them and tell them that you have compared their services but that you would like to stay with them and can they improve their products and services to make you stay. It is amazing what you may get offered if you ask.

If you do make the switch make sure that all your automatic payments in and out of your accounts are organised to continue under your new account system. If you forget to do this you could be up for some severe penalty rates.

Cover Yourself For The Change

It may pay to keep both accounts going for a couple of months and keep some funds in the old account to cover any bill payments that may occur. It could happen that you send your new information to a creditor for a bill to be paid from the new account but it might not be processed in time so you get charged from your old account. So that you do not lose any services like electricity or phone, it pays to leave some back-up funds in the old account.

It will cost you an extra account fee for a month or two, but that could be well worth it.

Finally, when considering look at switching bank accounts look at all the products on offer and see if there are any package deals that will save you money as well as give you the service you require.