How to switch accounts

You should never close your old account before you have set up new facilities, or you could end up with cheques bouncing and payments getting lost. So follow these five easy steps:

1. Open your new account

First off, you should complete the formalities of opening your new account, such as proving your identity and salary qualification (if required).

2. Get the new bank to start the switch

When you have been accepted as a customer, sign a switching mandate to allow the new bank to get details of your direct debits and standing orders from your old bank.

The Banking Code, to which all the major banks subscribe, states that, if you want to move your current account to another bank, your existing bank must supply details of standing orders and direct debits within three working days of receiving a request. Your existing account must be closed without unnecessary delay when you ask the bank to do so.

You cannot be charged for either closing or switching a current account, except where charges have already been agreed.

3. Start using your new account

You should he able to start using your new account immediately, but you need to take care that you have enough money in both accounts if payments may be made from them. Once the new bank has details of your direct debits and standing orders it will contact the companies and organisations concerned and arrange for your new details to be registered.

4. Notify anyone making payments into your account

It is down to you to sort out regular payments into your account. This means your employer, pension provider, issuer of benefits and tax credits, and any companies you receive share dividends from.

5. Maintain both accounts

The transfer of all payments in and out of your account can take a while, so keep both accounts open for several weeks. If you don’t have enough money to keep both accounts running in parallel during this period your new bank may be able to grant you a temporary free overdraft facility.

6. Close your old account

Once all payments have been transferred successfully, your new bank will tell you that the switch is complete. You can then close your old account.

August 2006

---

Tag this article :