It’s not you, it’s me: breaking up with your bank

The Momentum UK Team 14 February 2014

It's not you, it's me. I mean, I’m sure there are people out there that would appreciate what you have going on, but I just don’t think it’s right for me personally...

Remember when we first started out? You lent me money when I really needed it, and you gave me that gift on our one year anniversary. But lately, I’ve noticed that your heart hasn’t really been in it and my interest rate has dropped. We’re too familiar with each other, and you just haven’t treated me as well as you could have. I think what I’m trying to say is that we’re in a rut, and I want out.

Breaking up with your bank used to be a fairly lengthy, sometimes difficult process, but thanks to the Current Account Switch Service, it may now be easier than ever to switch current accounts, and, if your bank signed up to the new scheme, it could take just 7 days.

Why switch?

There are a number of reasons why you might want to switch current accounts but perhaps the most common is, quite simply that you could get a better deal (or service) elsewhere. Does your current account offer the best interest rate for your circumstances and needs? Could an account that requires an annual fee to use actually provide you better value because it offers a better interest rate? Could switching give you access to a better savings account rate?

If you’re lucky you already have the best deal for your needs, but if that’s not the case- or if you’re not sure- shopping around regularly and switching if you can do better elsewhere can help ensure that your money is working as hard as possible for you.

What’s Current Account Switch?

Since the 16th September 2013, for many banking customers it’s been easier to switch current accounts than ever before, with 33 banks and building societies now signed up to the new scheme, there’s loads to choose from. You can read more about the Current Account Switch, including which banks are involved on the Payments Council website here.

Quick as a flash

As well as being able to pick the date you switch, it should now only take you 7 days, whereas in the past it would typically take as long as 18 to 30 working days. The new service could just avoid a messy break-up. Now existing Direct Debits and standard orders are automatically transferred to the new account by the bank. A redirect for payments is also set up on the account for the next thirteen months. As with anything, there are people reporting problems, and it’s worth noting that the 7 day promise does not include the arrival of your new bank card. You can read more about the Current Account Switch Service here

Everyone’s doing it!

Switching accounts is becoming more common since the Current Account Switch Service was implemented in September, and in the last three months of 2013, more than 300,000 people switched account, which is a 17% increase in account switches compared to the same time the previous year, according to figures published by The Payments Council.

Because of this new service, many banks have ramped up their new joiner incentives to sweeten the deal, but be careful not to get carried away by these, and consider the long-term benefits and drawbacks of the account.

Find the right bank for you

There’s plenty of banks left in the sea, so do you research to make sure you get a current account suited to your own money habits. Your finances, just like relationships, are important, and you need to find a bank and account that suits your needs. Research is one of the key factors to making good financial decisions, and it’s important to make sure that you choose financial services that are well tailored to your specific money habits.

Consider giving your life a makeover

There are other financial services that you might want to switch too, from mortgages to ISAs, to make sure you’re getting the best possible deal.

Always make sure that you’re not just moving for the sake of it though, and do enough research to be confident that you’ve got the best deal for your needs. If you want to save money by switching other services such as broadband and supermarket, why not take a look at our blog post Switch to Save? Variety could be the spice of life after all!

You can compare current account offers here.