Could you be stuck in the mud with your bank account and not able to switch in seven working days with the current account switching service?
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Who’s stuck with their bank?
This week it has been revealed the customers of Norwich and Peterborough (N&P) Building Society are stuck without an easy way to switch, but there could be more current account customers of small banks and building societies out there who could be at risk.
All N&P customers will see their current accounts closed by 31 August 2017. The move is part of cost saving measures by their parent group Yorkshire Building Society, who don’t offer current accounts.
This would just be another sad story of a regional bank closing down branches and scaling back operations, if it wasn’t also for the news that N&P’s 100,000 current account customers will be unable to easily switch current accounts, as N&P isn’t a member of the current account switching service.
N&P has contacted each customer individually to tell them what they need to do with their accounts and offers guidance here.
What is the current account switching service?
The current account switch service is a guarantee backed by regulators to make it easy to switch to a new account.
If you want to change banks with the service all you need to do is open a new account with member bank. Look out for this logo, it’ll normally be displayed if a bank offers the switching service.
Often banks will offer cash incentives and special deals if you switch to them via the service.
During the switch your new and old bank will handle everything else, and within seven working days (or by a later date of your choosing) they will:
- Transfer your money to your new current account
- Close your old current account
- Move your direct debits and standing orders to your new account
- Tell your employer to pay your salary into your new account
Your new bank will also be held liable if anything goes wrong, so you can claim against any missed payments or charges. Read more in our step by step guide to switching current accounts.
What can you do if your bank is not a member of the switch service?
If your old bank isn’t a member of the current account switching service, like Norwich and Peterborough Building Society, you will have to manually switch your accounts – even if your new bank offers the switching service.
This will involve opening a new account, to do this you will typically need two forms of photo identification (ie passport and driving license) and proof of address.
You can either apply online or in a branch, and it’ll usually take a few days to week or so to set up your account and get a debit card, but this could be sorted in one day, depending on the bank.
If you want to make this your main account you should then waste no time to do the following:
- Transfer money from your old account to your new one
- Update HR or payroll at your workplace with your new account details (bear in mind this could take days for them to process this, so don’t leave it to the last minute before payday), or notify your pension funds and other income sources (tenants, dividend share schemes etc…)
- Open standing orders and authorise direct debits for your existing commitments (utility bills, credit cards, mortgages, loans, gym and club memberships etc…)
- Cancel all outgoing payments and direct debts from your old account
- Close your old account, you will need to pay any existing overdrafts or charges before this happens
It could also be worth enquiring about any switching support that both your old and new bank provide, as they may offer their own on-boarding or switching schemes.
How to find a new current account
The best bank for you depends on what you want from a current account. You can compare accounts with uSwitch’s bank account comparison service.
If you consistently have a reasonably large bank balance of around £2000+ (that you don’t want to put into a savings account or mortgage overpayments), you could consider looking for an account that will pay you the most interest.
On the other hand, if you find yourself running out of money each month on a regular basis, then you might be after an account with the cheapest overdraft.
And if you’d just like to choose a bank based on customer service, you could take a look at uSwitch’s current account customer service awards and pick a bank you like the look of.
- Switching your current account: step by step With the current account switch guarantee it’s easier to switch your current account. Read on to see how it works step-by-step
- Current Account Switch Service launches – how will it affect you? The new 7-day switching service aims to help consumers move to better products with ease