How to switch bank accounts
Posted October 19th, 2009
Gone are the days when you need to sit back and accept the banking solution you have had for years, but still know that it does not work for you anymore. It has become so much easier now than ever before to switch bank accounts and it does not even take a great deal of effort if you know how to do.
Understanding your banking needs will help you come to a quicker solution and to switch bank accounts as quick as possible without too much hassle. So what accounts do you have?
A transaction account
This is what most people refer to as their ‘bank account’ as it is their main operating account. It would probably be the account that your wages get paid into and from which you then transfer money out to other areas. In banking terms though, this is referred to as a Transaction Account.
From this account you probably have any automatic payments being taken out that you have set up and you also pay bills from it and you also may have a cheque book attached to the account.
All this sounds very convenient, doesn’t it, but the fact is that the convenience of an account like this ‘costs’ you money. You don’t actually pay too much money for using an account like this, but it costs you in the sense that you do not get a very good interest rate on this account either and therefore lose out on some income from it.
What you can do though is have a linked bank account with higher interest where you hold your funds and move money back into the transaction account if you need to.
Is switching going to be a good move?
Banks are constantly changing their products and also the benefits of accounts, so it would pay to look at your present account and see if you can improve upon it by changing.
Do you need:
- Higher interest
- Lower fees
- Easier access
- Better service from the bank
- Better features
When you have assessed what will best suit your style of account use, check to see if you will save by switching bank accounts. Research the products of other banks.
Preparing for your new bank account
It is not too difficult to set up a new bank account. You need to take in the necessary documents to give the bank the 100 points necessary to open an account and you are in business.
BUT what is important is that you make sure that any payments you have going into and out of your account automatically have been changed so that there is no interruption to that service. If the automatic transfer is for paying something it is very important because if certain accounts are not paid on time they will attract a penalty fee.
To make this easier ask the bank that you are leaving for a list of all your direct debits (bills paid by automatic payment) and direct credits (income by automatic payment) for the last 13 months. This way you will know everything that has gone in and out of your account automatically over the year and you can contact the necessary organisations to change your bank account numbers. It is good to have a list such as this because not all automatic transactions are on a monthly basis, like tax refunds for example, and can easily be forgotten.
Double check your own bank statements and make sure that you have no automatic payments going between your bank accounts at the same bank, like into a savings account or retirement account.
It’s the annual memberships and fees that could trip you up so make sure you check back for that past year.
Opening up your new bank account
Most banks will help you transfer automatic payments and if you give them a list of your payments in and out for the past 13 months they will organise this for you. If they do not actually do it themselves, they may have an administration set up that will help you with contacting anyone that you need to. Ask your new financial institution what they can offer you to help with the transfer.
Cover yourself for the change
It may pay to keep both accounts going for a couple of months and keep some funds in the old account to cover any bill payments that may occur. It could happen that you send your new information to a creditor for a bill to be paid from the new account but it might not be processed in time so you get charged from your old account. So that you do not lose any services like electricity or phone, it pays to leave some back-up funds in the old account.
It will cost you an extra account fee for a month or two, but that could be well worth it.
Finally, when considering look at switching bank accounts look at all the products on offer and see if there are any package deals that will save you money as well as give you the service you require.
Related posts:
- How to Switch Bank Accounts
- 5 Easy Steps To Switch Your Bank Accounts To St George
- Switch Banks: Switch Your Accounts to St. George
- Have You Considered A Switch To Save Money With Your Bank Accounts?
- Switch Banks: Switch Your Accounts To NAB
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