How To Switch Banks | Banking Direct

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How To Switch Banks

If you want to consider how to switch banks, then there's a few things to think about.

Interestingly, most people switch banks because they want to earn more interest, not because they think the service is better, like the idea of Saturday opening hours, or think the staff are better trained. In the end, it comes down to economics: can my money do more for me in another bank account.

And whilst many people are motivated by better returns, more people are effected by apathy; most people won't change their bank accounts from the one they first chose at University, or in their first job. Which is most telling, given that it can take as little as ten minutes to fill out the paperwork for a new bank account.

In principle, the process of switching bank accounts is relatively simple. You choose a new bank, tell them you wish to open an account, fill out the appropriate forms (usually two, an application and transfer form, provide two forms of identification (one which confirms your identification, the other which proves where you live), and, give them details of your old bank. And that's it. The rest should be automatic, as the old bank should automatically send details of standing orders and direct debits to the new bank.

Of course, it's not always that simple. The form filling can be an onerous task, the new bank might insist on a credit check and once completed, refuse your application, or not be satisfied that you are who you say you are (banks have to be very careful about identification, given the tough laws on money laundering). But, this aside, the process of how to switch banks should be straightforward.

And new rules which state how banks and building societies should behave in the switchover process, have made things easier for their customers.

For example, the bank you have chosen as the new home for your money has ten days, from when your application has been accepted, in which to open your new account. Your old bank has three working days in which to pass along your information to your new bank. This information will usually includes your credit history and details of your direct debits and standing orders.

And the companies with which you have standing orders have improved the lines of communications with the banks, meaning that on average, it takes about eight weeks to get all the paperwork completed on say direct debit change details, if you do it yourself. Although nowadays there are a number of automated systems and procedures which cut down the time dramatically.

So, the process behind how to switch banks is, in principle, simple. The consideration then is which bank to switch to. One that pays interest maybe, but you should also consider all those other factors which make up a good bank.