The Benefits Of Switching Bank Account

The number of people switching bank account has decreased in the last decade according to Statista. 40% of people say they only change banks once every 10 years, and 20% it’s 20 years or more.

But as we should be making smart financial decisions should we be switching bank account?

There’s nothing wrong with sticking with loyalty and your existing bank account if you think it suits your needs. But it’s worth shopping around to see what else is out there.

Benefits of switching bank account

Switching bank accounts doesn’t need to be difficult, in fact banks make it super easy. And with interest rates so low it’s good to shop around, especially for those additional benefits.

Cash reward for switching

Generally banks will offer a cash reward in exchange for switching to them. There are usually conditions such as staying with them for a period of time, usually a minimum of 12-18 months. The other conditions differ depending on the bank such as having your wages paid into there or above a certain amount each month. Some say you have to have a least 3 or more direct debits etc. But if you’re switching your main current account most of these things should be quite easy.

A good cash reward tends to range from £120-180. When I switched our main account to HSBC last year we got about £150 as a cash reward which came in very happy.

Free perks for switching bank account

Some banks offer other types of perks ranging from free cinema tickets to a taste cards. Check out the extra perks and work out what’s the biggest benefit to you and what you’d use. For us we have Cineworld cards so the cinema tickets weren’t a benefit for us. So we opted for the best account with the highest cash reward.

A better suited account

Switching bank account might just be be because you find one better suited to your needs and the extras are just a bonus. We originally looked to switch as I wanted to change my current account into a joint account with Luke but my old bank (Halifax) were making it very difficult and would only do it in person. But we had to have so many different appointments. So I opened a joint HSBC account and made the switch.

You may want an account that allows you to pay cheques in online, has lower fees, better cashback rates or has specific savings functionalities. Or perhaps you want an account with a good pay monthly package for insurance etc.

Finding better interest when switching bank account

If your account is always in credit find an account that pays you a good rate of interest on your balance. You may have to shop around to find a good deal but you may find one better than you currently have.

Isn’t it a hassle to switch bank accounts?

If you find a current account you want to switch to then the Current Account Switch Service will make the process of switching run smoothly. They will move all of your payments (direct debits and standing orders) to your new account. They’ll change your money coming in such as your salary, and usually they’ll instantly transfer any funds paid into your old account for a certain period of time.

You get to choose a switch date that works best for you and you get a guarantee that it will be done within seven working days. If any mistakes are made during the switching process the bank will refund any fees you incurred or interest you paid to both your old and new accounts.

Whenever I have switched account I have monitored all payments for the first month to ensure everything looks correct and I’ve never had any issues.

What to do before you make the switch

It’s useful to save your last few months of bank statements from your old bank and screenshot or save any information you may need. After the switch is complete your old account will be cancelled so you won’t have access to your account. This is a great time to have a clear up of your direct debits and standing orders. It makes no sense to switch ones you no longer need so cancel them beforehand.

If you have and need an overdraft make sure the new account you’ve chosen will offer this and make sure you set it up when you apply.

The process of switching bank account

When you go through the process don’t just click to open a bank account with your new chosen bank. Find the section about switching bank account, if you don’t you may miss out on the switch service and any perks/ benefits offered.

Chose a switching date that is convenient for you. Most banks will be booked up so generally a 3-4 week wait is pretty standard. I tend to choose the point in the month where the least direct debits/ standing orders come out for ease. But this isn’t essential.

Once you have applied and selected the date, it’s all down to your new bank to handle. They’ll update you when the switch has begun and when it is completed. They’ll go through the process of doing everything else.

Have you benefited from switching bank account before?

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