When did you last change your current account? These days there is plenty of competition in the current account market, as we’ve highlighted in this round-up of the Best Current Accounts.
Time to switch?
The banking landscape has changed in recent years as traditional high street providers have needed to up their game to contend with app-based challenger banks such as Monzo and Starling.
From cash switching incentives to fee-free overdrafts, benefits available mean the days of sticking with the same bank for decades are long gone – or should be.
But the perceived hassle and potential problem involved in the switching process puts many people off swapping their current account for a better one – and this is where the Current Account Switch Service comes in. Launched in 2013, it is a free service designed to make it quicker and easier to switch bank accounts. Here’s everything you need to know.
What is the Current Account Switch Service?
The Current Account Switch Service allows you to move from one account to another within seven working days, without worrying about incoming payments disappearing or bill payments being missed.
It’s completely free and can be used by individuals, small businesses, charities, and trusts to ensure the smooth transition of both outgoing payments such as direct debits and incoming payments such as your salary or benefits.
Account providers that are signed up to the service promise to:
- Enact the switch within seven working days (prior to a date of your choice)
- Redirect regular payments to your new account
- Transfer any money in your old account to your new one
- Ensure payments made to your old account within the first three years are automatically sent to the new account
- Refund any interest you miss out on due to a problem with the switch
How does it work?
Once you have decided to switch current accounts, all you need to do is apply to open an account with your account provider of choice.
If the bank is signed up to the Current Account Switch Service, you’ll then be asked to complete a Current Account Switch Agreement form and a Current Account Closure Instruction form that will be passed on to your existing account provider.
You can request not to use the service if you wish, but there’s little reason to do this as it is free and offers various assurances that should help to ensure your account switch goes smoothly.
The switch will mainly be handled by the bank you’re moving to, which will move across your payments and transfer your balance.
Once that’s done, your old bank will then close your account, and ensure further payments made to your now-defunct account are redirected.
This should all take place within seven working days. During this time you can continue to use your old account. The full switch will be completed on the switch date you chose.
Is there anything to watch out for?
There are, however, a few things to bear in mind:
- The Current Account Switch Service only guarantees a seven-day switch if you are doing a full switch (i.e., your old account is being closed). If you want to keep your old account open, it’s up to you to decide which payments to move across and which to leave
- Your new current account provider will be in touch at the start of the seven-day process
- The Current Account Switch Service covers all payment arrangements set up prior to the start of the switch process; payment arrangements set up during the seven working days before your switch date are not covered
- When electronic payments are redirected, an automatic message including your new account details goes out to the sender; some organisations may contact you directly to confirm this
- You’ll need to amend recurring debit card payments, such as online subscriptions, yourself as the card details will change
- You can use the service to switch to a joint account, but you can’t switch from a joint account to a single account
- Switching current accounts can affect your credit score, so it’s not advisable to switch too often – especially if you’re planning on applying for a mortgage, for example
Are all banks covered?
Around 50 banks and building societies have signed up to the Current Account Switch Service, allowing them to display a special logo on their marketing materials and websites and in their branches.
According to the Current Account Switch Service, this means it covers 99% of UK current accounts.
The participants include all the brands owned by the big four high street banks, as well as some – but not all – of the online-only challenger banks. Tide and Revolut, for example, are not members of the scheme at the time of writing.
You can find a full list of the account providers that are signed at the Current Account Switch Service website.
Does it apply to all types of account?
As the name suggests, this service is designed for current accounts. That includes basic bank accounts and some accounts you can only run via your mobile phone or device, as well as branch-based accounts.
However, you can’t use the service to switch:
- Joint current accounts (unless you have both account holders’ permission)
- Savings accounts
- ISAs
- Non-sterling payment accounts
What happens if the switch goes wrong?
The Current Account Switch Service is backed by the Current Account Switch Guarantee, which pledges that any charges or interest incurred due to a failure in the switching process will be refunded when you inform your new bank or building society.
If this doesn’t happen or you’re unhappy with the bank’s response, you can also take your complaint to the Financial Ombudsman Service.
If the Ombudsman finds in your favour, it could ask the account provider at fault to compensate you, for example by refunding any charges you paid due to the switching problems.
Account providers may also be asked to amend any negative impact this may have had on your credit report.
