Switching to a new bank account seems like it can be stressful, which is why many people never do it. But it's much easier than you think, and it's worth the change. Here's our step-by-step guide.
Whether you're looking for the biggest overdraft, the best customer service, or a reward to change, it's important to find a checking account that works for you to help you take control of your finances and hopefully save more money.
But once you've chosen your bank account, how do you actually access it?
Dealing with standing orders, direct debits, overdrafts and payroll can seem like a world of hassle. But thanks to the Checking Account Switching Service (CASS), you're unlikely to do anything. Let's explain.
What's in this guide?
Why switch bank accounts?
Here are some important things to consider before switching bank accounts:
- Will you get a cheaper or free overdraft?
- What is the cash reward for switching?
- Are there monthly bank account charges?
- Will you have to pay a amount every month?
- Do you get cash back or other rewards for what you spend?
- How is the bank's customer service?
- Will you be able to earn interest on your bank balance?
Change is not as stressful as many people think. If you're not happy with your current bank account or think you can get a better deal elsewhere, there's no excuse.
Make sure all friends who owe you money have your new bank details when you switch.
6 steps to changing bank accounts
Here's how to switch bank accounts in six easy steps.
1.Choose your new current account
First of all, you need to select the bank account you want to switch to.
We've ranked and reviewed the best student bank accounts, as well as the best graduate accounts on offer. It's also worth considering one of the new easy-to-use digital banks.
Make sure you don't get too distracted by the “gifts”. Instead, focus on the interest-free overdraft you can claim and the experiences of other students. These are the things that will affect your day-to-day banking.
After all, an extra £1,000 in your overdraft with no interest or fees is a much better deal than a one-off £100 cheque.
2.Open a new account
After selecting your bank account, visit the bank's website and apply. Be sure to indicate that you want to switch from another current account when you have the opportunity to do so.
You will need some form of identification and proof of address (your home address, not your fixed address) to complete your application. If you're applying for a student account, you'll also need proof of your student status (usually your UCAS status code or acceptance letter).
3.Start the bank account switch
Once your application is accepted and your current account is opened, you will receive a confirmation email.
You will then need to fill out forms to activate the bank account converter; Current Account Switch Agreement form and Current Account Switch Service – Account Closure form.
They basically confirm that you're happy to switch from your old checking account to your new one, and that you're happy for your old bank account to be closed once the switch is complete.
The current account change service is completely free. But remember, you'll have to pay the fees associated with your new account (although many don't, and student accounts almost never do).
4.Choose your switch date
With CASS, changing your old checking account to a new one will take just seven business days.
However, to make things more convenient, you can choose the exact date you want the change to take place. That is, as long as it's not a Saturday, Sunday or bank holiday and at least seven business days have passed since you opened your new account.
This means you can choose a date that will minimize any potential disruption for you. It is better to choose a time that does not coincide, for example, with standing orders at the end or beginning of the month.
Once you've chosen a date, your new bank must agree and approve it. If you wish to cancel a change, you must do so at least seven business days before the date of your change.
5.Continue using your old current account as normal
While you wait for trade-in day to arrive, you can continue to use your old one
6.Everything will move across automatically on your switch date
When the big change date arrives, you don't have to lift a finger. Your new bank will transfer all incoming and outgoing payments (such as direct debits, standing orders and salary payments) to your new account as well as your account balance.
Once they do this, they will automatically close your old account and the transition will be complete.
All this should happen without problems. But if there is a problem, under the exchange service guarantee, your new bank will refund the costs incurred by direct debits/non-transferred standing orders.
If you have a problem with your exchange, or if you believe that your new bank has not fulfilled the exchange service guarantee, you should first file a complaint directly with the bank.
If you're not satisfied with their response (or don't get a response), you can lodge a complaint with the Financial Ombudsman Service within eight weeks.
Frequently asked questions
Here are some of the most frequently asked questions about switching bank accounts:
Can you switch student bank account?
Applications for some student bank accounts are open to students only. In these cases, you won't be able to switch to them when you're on your second, third, etc. academic year.
However, other banks will allow non-first-year students to transfer to their student accounts. Be sure to check with the bank first.
It's also important to remember that student bank account overdrafts often work in tiers. This means you will be eligible for a larger overdraft in your second or third year compared to your first year.
When switching, check which tier you're eligible for to make sure you're getting a good deal.
What happens if someone sends money to your old account?
If someone accidentally sends money to your old account, don't panic. Money will not disappear.
For 36 months (three years) after your switch, all payments sent to your old account will be automatically redirected to your new account.
The bank will also provide the sender with your new account details to prevent the same mistake from happening again.
How long does it take to switch bank accounts?
It takes about five minutes to sit down and request to switch your account from one bank to another. Just apply online and voila for the change, it's sorted in just a few clicks.
That said, it may take a little longer if you've overdrawn, as you may need to contact your current bank regarding payments.
The actual process of transferring your cash and direct debits (if applicable) between banks and closing your account takes seven business days.
Can you switch bank accounts online?
The short answer is, it depends. Very useful, we know.
Whether or not you can switch bank accounts online depends on whether or not your bank is registered with the Checking Account Switch Service. Most UK banks have signed up for this service, but you can check if your dream bank has it here.
If you have taken too much money, you may not be able to complete the process online. You may need to speak with your current bank and your new bank on the phone or in person to determine your next steps.
Can you switch bank accounts if you're overdrawn?
If you are in your (authorized) overdraft, you can still switch your account normally by taking your overdraft with you. However, it is not guaranteed.
You'll need to request an overdraft from your new bank (student accounts get a 0% overdraft on variable amounts) and it will take into account how well you've managed your previous overdraft.
If your overdraft request is accepted and it is equal to or greater than the overdraft amount on your previous account, you will be able to transfer your overdraft.
However, if you can't take your overdraft with you, you'll need to make arrangements with your old bank to get this money back.
Does switching bank account affect your credit rating?
Switching to a new checking account will only affect your credit score if you've been denied based on your credit score, or if you open multiple new accounts in a short period of time.
Banks will carry out a credit check when opening a new bank account and especially when requesting an overdraft. This will leave a mark your credit file.
This is perfectly normal and won't negatively affect your credit score, but opening a new bank account every month is not a good idea.
Does your old bank account close after switching?
If you want to open a new checking account but also keep your old account, you can. However, you will not be able to use the current account switch service.
With the Partial Exchange Service, you can automatically transfer some or all of your payments to your new account. Please note that there is no seven day guarantee and you will not get a refund if things go wrong.
You also won't be able to specify your preferred switch date like you can with a full switch.
Also, many of the freebies banks offer to new customers are only for those who make a full switch, so be sure to check the fine print if that's what you're looking for.
How often can you switch bank accounts?
Technically, there is no limit to how often you can switch banks. But before you do that, you should read the terms. Some banks require you to stay with them for a certain period of time in order to receive bonuses or gifts. Please note that with CASS it may take up to seven business days for your account to be successfully switched.
And, as mentioned above, opening and closing multiple bank accounts in a short period of time can affect your credit history.
Want to keep your old bank but get a credit card instead? There are also specially made for students.