Switching Accounts

Published Monday, 16 April 2012
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Ever wondered how to switch your personal current account? The Consumer Council explains how.

Many consumers believe switching their current account is difficult and time consuming. With the right information and advice, switching can be a quick and hassle-free exercise and all banks and building societies must offer you this service free of charge.

How to choose a new provider

You can choose your new account by using comparison websites, picking up leaflets in local bank branches or reading reviews of bank accounts in the newspaper. Some banks offer substantial rewards to new customers but it's wise to read all terms and conditions related to the reward. If you rely on an overdraft facility check the list of fees and charges that would be applicable.

Checking fees and charges

Banks levy charges if, for example, you make a payment when there is no money in your account or you go over your agreed overdraft limit. You can check how much you will be charged by asking in the branch or visiting the bank's website. Nearly all banks provide six standard scenarios which make it easy to compare the charges from one bank to another. In the bank's website, type 'charging scenarios' to find them and compare.

Choose the account that suits you

You should avoid going overdrawn where possible. However, if you rely on an overdraft facility, look for a bank that offers a good rate on overdrafts. If you don't use an overdraft facility then an account with high interest may work better for you. If you travel, you may be interested in getting free withdrawals overseas.

Annual Summary

All banks operating in NI are now starting to provide customers with an annual summary. If you haven't received one yet, it will arrive at some point this year. An annual summary shows you how much you have paid in fees and charges and how much interest you have earned over the year. It is worthwhile examining the charges and fees you have paid and any interest earned to discover if it is worth moving to a new provider.

If you switch, your new bank will sort everything out.

Once you have selected your new account and informed the bank, they will do all the work for you.

The new bank will tell you:
- How switching your account works and who is responsible for each step.
- What information it will get from your old bank.
- What features your new account will have.
- How long it should take to complete the switch.

Once your application has been approved, you should be able to use your new account within ten working days. The new bank will also move your payments by doing the following:

- Transfer your direct debits, standing orders and your balance.
- Once this is done, give you a list of your direct debits and standing orders to check that it's right.
- Give your new account details to organisations you have direct debits with (for example, gas, electricity and mobile phone companies).
- Set up a free overdraft for three months (if you want it and you meet the bank's requirements).

The overdraft facility to protect you in case you incur any fees or charges by going overdrawn because of any failure in the switching process. If you do not want an overdraft or one is not available, the new bank will, within a reasonable time, give you back any charges or interest due to any failure.

Your old bank will:
- Transfer any available balance to the new account at a date agreed by you and the new bank.
- Close your old account, if you wish.
- Give back any charges or interest that you had to pay to the old bank because of any mistake in the switching process.

What you will need to do

If you receive regular payments into your account (such as a wage or benefits) you will need to tell the payer (for example, your employer or benefits agency) the details of your new account.

Further potential developments on the switching process

The Payments Council is currently working on a new current account switching service, due to launch in September 2013.

The new switching service, which all banks will offer, promises to:

- reduce the amount of time it takes to switch an account from around 18 days to seven working days;
- provide an account switching guarantee that consumers can rely on.
- automatically switch incoming payments to the new account.

When it comes into operation, the new service will make it quicker and simpler to switch account. This is likely to lead to a more competitive and transparent market place for current accounts - which is great news for consumers.

Further help

On www.moneymadeclear.org.uk there's useful information about opening accounts, making payments and what to do if things go wrong. You can also ask for copies of these leaflets in your local bank branch.

If you are unhappy with the switching service, complain directly to your bank.

If you are not satisfied with their response you can take your complaint to the Financial Ombudsman Service (FOS). The FOS helps settle individual disputes between banks and their customers and it is completely impartial and free. Call 0800 0234 567 or go to www.financial-ombudsman.org.uk

© UTV News
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Consumer Council
Consumer Council

The Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland's consumers.

They aim to make consumer voices heard and make them count.

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