How to save money by switching bank account
A leading consumer expert has shared her advice on how to save money by switching bank accounts.
Jane Hawkes said the process is now “easier and quicker” than ever, and that consumers can save a bundle in the process.
Money and consumer expert Jane explained: “In times gone by, switching bank accounts was a long, convoluted process, which involved a mountain of paperwork and a whole lot of work, effort and stress. Luckily since the introduction of the Current Account Switch Service the whole process has become a whole lot easier and quicker.”
Here Jane shares her quide on what you need to know about switching, and offers her tips on how to best achieve it.
Why switch bank accounts?
Despite some big lenders including Barclays and Lloyds recently withdrawing cash bonuses for switching bank accounts, there are still lots of offers out there, banks regularly vie for new custom with a range of cash back offers, vouchers, interest free or lower overdraft charges, interest on balance payments, Avios points or extra benefits such as car breakdown cover. Who doesn’t love a freebie or an extra bit of cash?
There’s often a minimum monthly pay in, which can be tricky but a bit of moving money around from account to account might well be worth the effort. Some offers may also involve other requirements such as a set number of debit card purchases and/or payments in to the new account per month.
How to switch bank account
Simply apply for chosen bank account, choose start date and let the switch service do the work for you.
If you decide to switch bank account you will need to provide basic details to your new provider such as your account and debit card numbers. You will also need to choose a date that you would like the switch to take effect bearing in mind that it can take seven working days.
The Current Account Switch Service takes care of the whole process including transferring all your direct debits and standing orders to your new bank, moving your balance and redirecting any usual salary, benefits or pensions payments. It’ll cover the closure of your old account so you don’t need to worry about that either and you can even switch if you have an overdraft or if you have a joint account.
The Account Switch Service Guarantee means that any payments accidentally made into your old account will automatically be redirected to your new one and your bank will inform the payee of your new bank account details. If anything goes wrong with the switch, you can have peace of mind of knowing that any interest lost or charges incurred will be refunded to you.
There is no limit to the amount of times you can switch but every time you switch a credit check will be carried out. This means that if you are thinking about taking out a mortgage anytime soon or applying for any other type of credit, it might be best to hold fire on switching bank account for at least six months beforehand.
Where to find the best bank account switch offers?
A NEW First Direct switch offer for new customers only has just been launched with a £175 welcome bonus. Conditions include £1000 minimum pay within 45 days of opening the account, switch using the Current Account Switch Service, transfer over at least 2 direct debits/standing orders and make at least 5 payments with your card in the first 45 days. If you apply via Top Cashback you could even pocket an extra £35 cashback too.
TSB is offering a £100 bonus to its Spend and Save bank account customers. Just log on to the app and make at least 5 payments before the 27th September. New customers can earn £15 cashback each month for the first six months provided that at least 20 direct debit payments are made per month. Other banks offer alternative incentives.
New Halifax Current Account customers can benefit from a 0% interest- free overdraft and up to to 15% cashback from selected retailers.
The Chase Current Account offers 1% cashback on everyday debit card spending for the first year.
With Starling Personal and Joint Current Accounts you can earn 3.25% AER / 3.19% Gross (variable) interest on balances up to £5,000 .
If you’d rather hold out and make money by switching bank account, keep your eyes peeled for new offers to re-appear.
