Current Account Switch
Back in September 2013, the government introduced the Current Account Switch Guarantee, allowing customers to switch current accounts within 7 days.
What Is the Current Account Switch Guarantee?
In the past, many people were reluctant to leave switch their bank account even if there was a better deal elsewhere because they were worried about the hassle of changing all their direct debits. In order to overcome this problem, the Current Account Switch Guarantee was introduced. At the moment, most current account providers in the UK have adopted the Current Account Switch Guarantee. Once you have decided which current account you would like to switch to, the provider will get you to fill out a switch form and an account form and decide on a switch date. On the switch date, you can start using your new current account.
The current account switch guarantee has been very positively received so far as more than 600,000 swapped current account provider in the first 6 months of the scheme.
However, the Current Account Switch Guarantee is not just about giving customers more freedom, the guarantee is also to prevent the current account market from being monopolised by the ‘Big Four’. For many years, the current account market has been dominated by Barclays, Lloyds, RBS and HSBC and it is hoped that by introducing this guarantee it will improve competition within the market which is better for consumers and small banks and building societies.
The Benefits of the Current Account Switch Guarantee
The Current Account Switch Guarantee takes care of reorganising all your incoming and outgoing financial arrangements, such as your salary and direct debits. This makes switching over significantly less stressful. In addition, this speeds up the switching process. In the past, it would take around 8 weeks to move all these financial arrangements yourself. However, now that the bank takes care of it for you, the process takes a mere 7 days.
Another great thing about the Current Account Switch Guarantee is that you won’t lose out on interest if something goes wrong during the switch. If you notice that you have lost out on interest, contact your new provider and they will refund the difference.
In addition, if someone accidently sends money to your old account, they will be contacted and given your new banking details.
You are allowed to keep using your old current account until the official switch date when you can begin to use your new account. This allows for a seamless banking experience.
After switching over to your new account, your standing orders and direct debits will be tracked for 13 months to ensure that nothing goes wrong.
Choosing a New Current Account Provider
If you have decided that you want to take advantage of the Current Account Switch Guarantee and search for a better current account elsewhere, here are some helpful tips to ensure that you get the best deals:
- To begin with, look out for switching bonuses. Many banks and building societies in the UK offer cash back as a way to entice customers to switch.
- Be sure to look at how much interest current account providers are offering their customers. In addition, be wary of any clauses: do you have to pay in a set amount of money each month to qualify for interest?
- Be wary of any subscription fees. There are plenty of great current accounts out there which are free, so if you are required to pay a monthly or annual fee for your account, make sure that the incentives are worth it.
Comparison of Top Current Account Providers
|Provider||Account Type||Interest Rate||Incentives||Monthly Fee|
|RBS||Silver Select||0%||• Mobile Phone Insurance
• Amazon Instant Video Subscription
• Travel Insurance
|Halifax||Ultimate Reward Current Account||0%||• £100 Cashback
• Cashback on shopping
• Travel Insurance
• Break Down Cover
|Barclays||Current Account||0%||Personalised debit card||£0|
|Santander||123 Current Account||3%||Cashback On Bills||£2|
|First Direct||1st Account||0%||£100 Cashback||£0|