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Q&A: bank accounts
Millions languish on dire accounts that pay pitiful rates of interest, come with sky-high fees or offer shockingly bad service. But don't bitch – just switch! Banks are salivating for business, pushing out lucrative perks for switchers.
In this guide
10 tips to find your best account
Not every bank account's going to be the right one for you. But with these 10 tips, you can find out how to find and switch to the best account for YOU.
Switching should now be quick & hassle-free
If you haven't switched bank accounts in the last couple of years, you'll find that the process is now much quicker and easier than it used to be.
This is because 'seven-day switching' was introduced in September 2013, meaning switching accounts is now – for the majority – quick, easy and completely pain-free.
Under the new scheme, a switch takes seven working days, all your incoming and outgoing payments will be moved to your new account, and any wrongly applied charges will be refunded.
If you haven't tried it, and your bank gives you lousy service, read below for full info, then take a look at our top pick accounts.
How long after I switch will payments made to my old account find me?
Your new bank will arrange for payments accidentally made to your old account, or taken from your old account, to be automatically redirected to your new account for three years after the switch. It will also contact the other person/company and give it your new account details.
This means the age-old fear that you'll miss cash people pay to you, or that your employer will send your salary to your old account, could be a thing of the past if banks keep their promises – the old system required you to make sure your employer, and other people who pay money into your account, knew your new bank details.
The seven-day switching service will transfer all direct debits and standing orders. So, you shouldn't miss mortgage, council tax or utility payments (though it's best to pick a switch date far away from the days you pay your bills to avoid confusion).
Are recurring payments from my card also moved?
Otherwise known as continuous payment authorities. these are set up using your debit or credit card details, as opposed to your account number and sort code. They're often used for memberships, online
subscriptions and payday loan repayments. The company will ask for the long number across your card, giving it permission to take cash from your account.
If you switch, you'll need to give your new card details to any companies that take money from your card in this way.
Your new bank will automatically close down your old account as part of the seven-day switching process. If you'd rather keep it open, you can still opt for the older, longer service. This takes 18 to 30 working days and offers no guarantees if anything goes wrong.
If you opt for a specific date for the switch to complete, the process will begin seven working days before this date.
If you don't, it'll start the day you initiate the switch.
Can I still switch if I'm overdrawn?
There aren't any set rules in place when switching if you're overdrawn – it will vary between providers. Whether you get an overdraft, and whether your limit is high enough to switch your overdraft, will depend on the new account provider's normal lending procedure.
If your new bank or building society can't help, you'll need to make separate plans to pay back what you owe. Try the free budget planner to help.
Will my new debit card and PIN arrive within the seven days?
Bizarrely, given the song and dance about seven-day switching, your debit card and PIN aren't covered by it. So despite your account being open and set up – and your old account closed – in seven working days, you may have to wait a few days to access your money.
The best-buy bank accounts with no or low minimum pay-ins
Most hot bank account deals require you to 'pay in' a certain amount each month to get the benefits. And many are worried they'll fall foul of this, making the deal pointless.
In fact, just because a bank has a minimum pay-in, that doesn't mean you must be in credit. It means that you must pay in a set amount – banks' way of ensuring your income/salary goes through the account.
For example, Ј1,000/mth equals a Ј13,200/yr pre-tax salary. So the best thing to do is to find all the top accounts that meet your minimum monthly pay-in.
The only best buy without a minimum pay-in is the M&S account. It gives a free Ј100 M&S gift card to switchers, plus a Ј100 0% overdraft and 6% linked regular saver.
Top bank accounts (ranked by minimum pay-in)Source: www.moneysavingexpert.com