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Guide to the New Current Account Switching Service

Guide to the New Current Account Switching Service
Date of Publication: Friday, 10 January 2014 00:00

A seven-day switching system introduced in September has made it easier than ever to switch current accounts. Read on to discover more about the new service.

 

 

Your New Current Account Switching Process

 

1. From September, banks have just seven days to arrange a current account transfer – just a quarter of the time it used to take.


2. You only need to deal with a new bank to organise the switch.

 

When applying for a new current account, details about Direct Debits or other payment orders can be left with the new bank, which will take care of the arrangements.

 

3. Any payments to or from an old account will be automatically redirected to the new one.

 

If an employer doesn't update your account details in time for your next payday, it's no problem! Payments involving the old account will be automatically redirected for 13 months, and your new bank will update the agent of your new details each time this happens.

 

4. If any aspect of the transfer goes wrong, customers will have all charges refunded.

 

Some banks may even continue to offer goodwill gesture payments if they fail to perform the transfer correctly and on time.

 

Payments Council - Switch Guarantee

Switch Guarantee, issued June 2013. Select for full-size (opens in new tab).

 

Why is Change Necessary?

 

  • UK: Four banks control roughly 75% of the current account market.

In the UK, four high-street banks – HSBC, Barclays, the Royal Bank of Scotland Group, and Lloyds Banking Group – dominate the market for current accounts.

 

To consider that these groups also include NatWest, Halifax, and the Bank of Scotland, it shows how competition has reduced following the mergers between banks that have taken place since the start of the financial crisis.

 

Transaction Fees

 

Smaller “challenger” banks have made some inroads as disgruntled customers of the scandal-struck banks have turned towards alternative providers.

 

But the Office of Fair Trading remains concerned that major changes are still needed in the personal current account market. It has refrained from referring the issue to the Competition Commission until it sees how the new switching changes have performed.

 

(Over 300,000 switched current accounts in the last three months of 2013. Read more about it here.)

 

  • Europe: Improving Competition throughout the EU.

The European Commission has demanded a 15-day switching service across member states by 2014 to force the banking sector to become more co-operative and more competitive.

 

The UK has gone further and faster than this. Thanks to the Payments Council, which has invested more than £750 million in the new service, the seven-day switching service was introduced a year ahead of this deadline.

 

In May 2013, it was revealed that the Council’s interventions had prompted a revision of the ISO 20022 global standard that ensures the reliable transfer of financial data.

 

  • Research: Consumers Need Change

Payments Council - Reasons for not Switching

Source: Payments Council, Account Switching – Quantitative Market Research Results, September 2012.

 

The Council’s research identified the key concerns that consumers have over switching accounts – namely that switching was too slow, too cumbersome, and too error-ridden.

 

The faster switching process, with its automated redirection and guarantee, is designed to assuage these concerns.

 

Which Banks / Building Societies Are Taking Part?

 

The banks signed up to the switching system at launch are listed in the table below (last updated 10th January). Tesco Bank is expected to join when its current account is closer to launch.

 

Adam & Company

Lloyds

Allied Irish Bank (GB)

M&S Bank

Bank of Ireland UK

Metro Bank

Bank of Scotland

Nationwide Building Society

Barclays

NatWest

C. Hoare & Co.

Post Office

Clydesdale Bank

Royal Bank of Scotland International

Coutts

Reliance Bank

Cumberland Building Society

Santander

Danske Bank (Northern Bank Ltd)

smile

Danske Bank (London Branch)

The Co-operative Bank

First Direct

The Royal Bank of Scotland

First Trust Bank

TSB

Halifax

Ulster Bank

Handelsbanken

Virgin Money

HSBC Bank Plc

Yorkshire Bank

Isle of Man Bank


 

Ensuring a Swift Transfer

 

In the opening months of the new service, banks and building societies have reported that mismatching information has been the biggest cause of delays. How can customers ensure a swift transfer?

 

  • Provide a Recent Statement

If customers apply for a new account with a recently changed name or address that is not listed with their old bank, it will be more problematic for banks to authorise the switch.

 

Banks are recommending that customers provide a recent bank statement to the new current account provider to ensure that the details match up.

 

  • Provide Debit Card Details

Customers can also speed up the transfer by providing the details of their existing debit card to their new bank or building society, which will allow the necessary checks to be done more quickly.

 

Have you been put off switching your bank account because of the hassle? Are you about to join the masses switching to a new bank? For the latest current account offers, check our current listings on Which4U.

 

 

Keith McDonald

Which4U Editor

Thanks for reading! Follow us on Facebook and Google+ for updates. For the chance to win £500 in vouchers, enter our competition.

Friday, 10 January 2014 00:00
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Top 5 Current Accounts

Provider
AER
Min Bal
O/D Rate
O/D Buffer
Apply
View Full Table >
3.00%
£1
0%
£100
3.00%
£1
No Offer
£25
0%
£1
No Offer
No Offer
3%
£500
No Offer
N/A
No Offer
3%
£500
No Offer
N/A
No Offer

Nationwide FlexPlus Account

Nationwide
  • £10 per month gets you the following benefits:
  • Get 3.00% variable on balances up to £2,500 (no interest for balances £2.5k+)
  • 3 month Fee Free overdraft
  • Commission Free Cash Withdrawals Abroad
  • VISA debit card with every account
  • Travel Insurance - Worldwide travel insurance, including winter sports, golf, business and wedding cover for you and your family.
  • Mobile Phone Insurance - Worldwide cover if your phone's lost, stolen, or damaged.
  • Breakdown Cover - UK & European breakdown cover for you in any private car and also anyone driving your car with your permission.
  • Extended Warranty - Get an extra 12 months warranty for eligible household electrical goods.
  • Identity Theft - Get help and support if your personal data's compromised or your cards are lost or stolen.

TSB Classic Plus Account

TSB
  • Classic Plus –
  • Pay in min £500/month, register for Internet Banking, Paperless Statements and Paperless Correspondence
  • £25 interest and fee free overdraft subject to application and approval
  • Must be over 18 and a UK resident to apply
  • Contactless Purchases upto £30 for each transaction-
  • 5% Contactless Cashback –
  • With 5% Cashback on your first £100 Contactless payments every month (T&Cs apply. Subject to eligibility. End Sept 2017)
  • Register for Internet Banking. 18+, UK resident and Classic Plus account holder to qualify
  • Cashback will be paid on qualifying purchases until 31 December 2016
  • Must hold a classic plus account with TSB to qualify
  • · No introductory offer period or monthly fee
  • · Classic Plus account available to existing and new customers
  • · Access to all the features of the standard Classic account such as Money Planner, Control, SMS alerts and internet banking
  • · Transact in branch, online or over the telephone
  • · No hidden clauses – only need to meet CTO, register for internet banking, paperless statements and paperless correspondence to get the 3% interest rate

Nationwide FlexAccount

Nationwide
  • VISA debit card with every account
  • The age restriction to open the account is 18
  • Manage your account online with an excellent internet banking service.
  • Three-month interest-free overdraft when you switch to FlexAccount
  • Free day to day banking
  • Voted Best Overall Online Provider 2009 by Your Money

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander 123 Current Account

  • The New 123 Current Account pays cashback on household direct debits
  • 1% Cashback on water and council tax
  • 2% Cashback on electricity and gas
  • 3% Cashback on mobile, home phone, broadband and paid for TV packages
  • New 123 Current Account pays also pays in-credit interest
  • 1% AER on the entire balance, once the customer’s balance is £1,000 or over
  • 2% AER on the entire balance, once the customer’s balance is £2,000 or over
  • 3% AER on the entire balance, once the customer’s balance is £3,000 or over (up to £20,000)
  • £5 per month.
  • Your overdraft fee will be 19.9% EAR plus an unauthorised fee of £1 per day.
  • Get a cheque book and a Visa Debit card. You can use your Visa Debit card in shops wherever you see the Visa symbol and at virtually every cash machine in the UK and many worldwide. It also acts as a £100 cheque guarantee card
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Access to your money 24 hours a day 7 days a week through our e-banking service, 750+ branches, 24-hour telephone banking service, LINK cash machine network or even by post
  • You must setup a minimum of 2 active direct debits
  • You must deposit at least £500 per month
  • You are able to Withdraw upto £300 a day
  • This account is open to NEW and EXISTING Santander customers aged 18 and above (must be UK resident)

Santander Everyday Current Account

  • A simple and straightforward current account that helps make managing your money easy and convenient.
  • 0% EAR (variable) overdraft rate.
  • No Daily Arranged Overdraft Fees for the first 4 months when you switch to us (depending on circumstances. See representative example).
  • After 4 months the Daily Arranged Overdraft Fee will be 50p per day capped at 20 days each monthly statement period (if you don't switch these Daily Arranged Overdraft Fees will start from when your account is opened.)
  • Access to our dedicated Switcher Service - It is important that you feel confident about switching to us and what is involved. Click here for full details of our simple three-step process.
  • Easy access to your account 24 hours a day with our internet and phone banking service. Plus you have access to over 1,300 Santander branches.
  • Get 4 Months Fee-Free Arranged Overdraft when you use the Current Account Switch Service to move your current account to us and receive a Defaqto 5 star rated service.
  • Withdraw upto £300 a day.
  • No interest is paid on your balance.
  • You must be aged over 18 and live permanently in the UK.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.

Santander 123 Mini Current Account

  • The 1|2|3 Mini Current Account is designed to provide a safe environment to learn money management and take the first steps towards financial responsibility for those aged between 11 and 18.
  • With the 1|2|3 Mini Current Account you'll get:
  • Rewarding interest rates paying 3% AER/2.96% gross (variable) on balances from £300 up to a maximum of £2,000.
  • £100+ = 1% AER
  • £200+ = 2% AER
  • £300 - £2000 = 3% AER
  • 24/7 access to your account via Online, Mobile and Telephone Banking.
  • Access nationwide via our branch network.
  • Free text and email alerts about your account.
  • The choice of a cash card or a Visa debit card.

TSB Classic Account

TSB
  • Free banking - no charge for everyday transactions when you’re in credit.
  • You will receive a debit card with your account
  • Manage your money 24 hours a day through Internet Banking, Telephone Banking and Mobile Banking.
  • Money Planner is a free, easy-to-use Internet Banking service that introduces a new way of keeping track of your money across your TSB personal current and credit card accounts.
  • £25 interest-free planned overdraft. (Subject to application and approval).
  • £10 overdraft buffer. No overdraft fees or interest to pay if you go overdrawn (either Planned or Unplanned) by £10 or less.
  • Grace period if you go over your limit. You have until 3.30pm (UK Time) to pay in enough money to avoid any overdraft fees you may incur that day.
  • Switching to us in just 7 working days – We can help to move Direct Debits and standing orders from any existing accounts to your TSB current account.
  • Access to over 600 branches and a network of ATM's worldwide