Learn how the 7-day current account switching process works and what the benefits of changing your bank account are
The “big four” of Barclays, HSBC, Lloyds Banking Group and The Royal Bank of Scotland Group dominated the current account market for years.
Numerous experts, government ministers and opinion polls pinned the blame on how complicated and time consuming switching banks can be.
Many people stick with the same account their parents opened for them, but the 7-day current account switching guarantee could change all of that, with 42% of consumers saying they’re more likely to make the leap from September 2013.
Introduced on 16 September 2013, the change not only makes it simpler for consumers to switch current accounts, but also increases competition between the banks.
Competition had been lacking in the current account market and consumers now have a wider choice as the banks do their best to retain old customers while creating incentives for new ones.
How does the 7-day current account switching work?
Virtually every current account provider, including all of the banks owned by the big four, have signed up to the new switching system.
This means that wherever you move your custom, both current account providers will be ready.
When you go to open up a new current account that you wish to switch to, you’ll just need your current bank details.
You’ll be asked to complete a Current Account Switch Agreement form – to begin life with your new current account – and a Current Account Closure Instruction form, to end relations with your old current account.
Finally, after confirming the switch date of your choosing, your new bank or building society will contact you to let you know that the process has begun a minimum of 7 working days before the date agreed.
You can continue using your old current account right up until your switch date so you won’t be stuck in limbo.
All of your incoming and outgoing payments will be moved to your new account, but if there are any issues, your bank or building society will get in touch.
Any money in your old account will also be transferred to the new current account.
What are the benefits of the 7-day current account switch guarantee?
The service will take care of your payments going out – Direct Debits and standing orders – as well as payments going in, such as your salary.
If anything goes wrong with the switch that causes you to lose out on interest, your new bank or building society will refund you as soon as they’re informed of the error.
For added protection in the period of 13 months after the switch, your old current account provider will be obliged to arrange for any payments accidentally made to them to be automatically redirected to the new account.
Furthermore, the sender of the incorrect payment will be contacted and provided with your new account details.