Some people or businesses are reluctant to switch banks because they think the process could be time-consuming and risk loosing information. It is easy to stay with the bank you first chose through inertia when but switching your account could help you get a better deal.
The Banking Conduct of Business Sourcebook (BCOBS) which replaced the Business Banking Code on 1 November 2009 commits banks to making the transfer of your account quicker and simpler.
The development of telephone and internet banking, means there’s a range of attractive packages and products available. Most of these are designed to help banks make profits so check that you are getting what you want and what you are willing to pay for.
Your old bank has to send details of your direct debits and standing orders to you and your new bank within three days of a request to do so. Your new bank must then set up these payments and inform the recipients of your direct debits within four working days. If they fail to fulfil their commitments you may be entitled to a payment from the bank concerned.
What should I consider before changing Bank?
* Understand why you are going to change banks eg cost, reliability service, location etc.
* Consider whether you are comfortable using telephone or internet banking or do you need to visit your branch.
* Do you need advice from your bank about credit, mortgages, business or other matters.
* Select your new bank after deciding on the above factors
How do you make the Transfer Smoother?
* Check the terms and conditions of the new account carefully. Contact your new bank and obtain application forms.
* Discuss any concerns you have before returning the forms.
* Complete the mandate from your new bank. This allows them to deal with your old bank on your behalf and request details of regular payments.
* The new bank will arrange for standing orders and direct debits to be switched. Check whether the bank will notify them, or whether you should do this.
* You should tell everyone who automatically sends you money like salary and dividends your new account details so they can continue to pay you.
* Keep monitoring both accounts carefully to check for errors or problems such as payments being made twice or missing altogether.
* If possible, keep your old account running until you’re sure the new bank can deliver the service you require.
* Your new bank should notify you when they are satisfied they’ve completed their responsibilities for the switch.
What are the Pros of switching bank accounts?
* A new account might offer more attractive interest rates or lower bank charges.
* Many bank accounts come with introductory offers, such as free banking for an initial period.
* If you’re unhappy with your relationship with your current bank, a new one might understand your requirements better.
* Your current bank may not offer 24-hour telephone or internet banking services you might want to transfer your business to one which does. Making payments and transferring funds electronically could also help you reduce bank charges.
What are the Cons of switching bank accounts?
* If your accounts are complex, it can still take time and there’s no guarantee of avoiding problems altogether.
* You will need to assess the impact of switching on other arrangements you might have with the bank such as loans or credit cards Your new bank may want to change the level or refuse them altogether.
* Staying with one bank for several years can sometimes help you demonstrate a certain level of financial stability. This can be important if you ever want a loan or are seeking other sources of finance.
* You will lose the benefits of personal relationships and the understanding of you as a customer that has built up with your current bank.
* Changing cards and documents means time and effort, new passwords and a bit of vigilance on your part during the change over.
Tips For Changing Bank
* When you do change keep your old account open for a while in case of problems.
* I have found it easier to open a new account for new transactions and never close the old account. More bumph but also more control.
* Joint accounts and business accounts are similar in function but make sure every signatory knows what is going on.