How do I: Switch my current account?

 

Jamie Merrill
Thursday 03 November 2011 01:00 GMT
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If you've ever thought about ditching your bank's current account, now's your chance. With complaints to the Financial Ombudsman up by nearly 25 per cent in the last quarter, more bank and building societies have tempting offers to lure you away.

"The bank-account market is red hot at the moment, so banks are willing to pay you £100 for switching. Provided you've a decent credit score you should jump," says Martin Lewis, founder of Money Saving Expert (moneysavingexpert.com).

"If you're thinking that switching account won't make much difference, you're wrong," adds Lewis. "While banking is 'free', this only applies if you're in credit. In reality, most banks pay you a pitiful 0.1 per cent interest and then loan your money out as overdrafts at 20 per cent. So ask yourself: 'Is it so good I'm willing to effectively pay hundreds of pounds a year in lost benefit?'"

And thanks to changes in the law, banks must now follow strict guidelines. Your old bank has three working days to pass information, including details of all your direct debits and standing orders, plus credit history, to your new bank.

But you'll need to get your skates on as some of the best offers may not be around for too much longer. Most banks offer dedicated switching services.

If you are willing to open an account in-store, the Co-op will offer you a whopping £200 to switch to its current account. Santander pays £200 to switchers who have a mortgage or savings account (with at least £10,000) with the bank.

Nationwide is guaranteeing it will contact all your direct debit companies within 10 working days, or hand you £100. It also promises to refund any charges incurred in the first three months due to mistakes.

Keep your eye on the ball. Many banks will require a monthly minimum payment (ranging from £800 to £1500).

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