How To Switch Your Bank Account To A New Bank

Learn how easy it is to switch bank accounts so that you can be sure you are getting the best deal. Understand the process, and that much of what needs to be done is done for you by your new bank.

It may seem a daunting prospect to switch bank accounts, but it is a simple process if you know what to do and what to expect. Looking to change banks is not something you should feel disloyal about, even if you have been a customer of one bank for many years. There is a great deal of competition for your custom and therefore some very attractive offers. There is no harm in at least reviewing your options because you may find that your bank no longer suits your circumstances or banking habits, and that there is a better option for you.

There is currently also the rather thorny issue of bank fees and penalty charges that many people consider to be totally unfair and even illegal. Although the big banks have lowered these recently, you should still check which are least punitive when you switch bank accounts, especially if you are prone to the type of account activity that attracts penalty fees.

The process to switch bank accounts is as follows:

1) Choose a new account

This requires a little research but it is far easier nowadays with the internet than when you would have needed to traipse around the various banks collecting information, then tried to assess products and costs on a like-for-like basis with multiple brochures open in front of you. These days, when you want to change banks, there are comparison sites you can visit that will quickly show you exactly what is being offered by the various banks, and will present this information in a simple fashion.

You could also take a look at the CHOICE consumer website to view how their members rate their everyday bank accounts.

First of all, though, you will need to assess your own personal requirements based on your present and projected circumstances and needs. These may have changed over the years and this is all the more reason why you should investigate whether you need to change banks.

2) Open your new account

The documents you need to open a bank account are based on the “100-points” system, which means that you must provide documents with a given points value of 100 or more. Documents such as a birth certificate or passport obviously carry more points, and one of these and a driving licence will give you more than the 100 points required. There are other options, such as presenting your Medicare card or a utility bill, but these both carry a lower points value. Your new bank will tell you which combination of documents you will need to fulfil the points criteria.

3) Transfer your regular payments

Contact your old bank and request that a copy of your “Direct Debit/Credit Arrangement List” be sent to you. They must provide this information to anyone who wants to switch bank accounts. This lists all your regular credits and debits from the past 13 months that are set up on your bank account, such as direct debts for utilities, loan repayments, or insurances. Once you have this, you can give this information to your new bank and it will arrange for all these to be switched to your new account.

If you prefer, you can contact these organisations yourself and give them your new bank account details. Whatever you choose, you will need to make sure your credit card payments, “pay anyone” transactions, and periodic payments are also switched, which you will need to do yourself. These can all be cancelled and instigated via internet banking.

You will also need to instruct your employer to switch your wages payments from your old bank to your new one.

As your payments are being transferred there may be a time during which you are not certain which bank is handling each payment. For this reason when you change banks you must make sure that there are sufficient funds in both the old and new accounts to cover them.

4) Close your old bank account

Once you are certain that everything has been switched, you can transfer any remaining funds and close your old account. Your old bank may need written notice, or you may have to visit your local branch to do this in person.

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