It won't be news to any of us that you can switch your current account to another provider if you can get a better deal elsewhere. A switching service, of sorts, has been around for ages, but the service has never been seamless or without its foibles. In the past, internet forums were frequently filled with discussions where payments had been taken from the wrong account, old accounts hadn't been closed, and account holders forgot to tell those paying in the details of their new bank.
Now in its third week, the new 'full switch' aims to bring the mayhem of switiching your current account to an end. Simply put, you go and open a new account with Bank B, and they arrange with Bank A to move your Direct Debits, Standing Orders and Bill Payments over to the new account within 7 working days. Further, payments in and out of your account that mistakenly get sent to your old bank will be redirected for a period of thirteen months. Your old account will be closed at the end of the switch.
People that have moved house and used the Royal Mail Redirection service will asking why a redirection service took so long, but BACS and the Payments Council will undoubtedly cite computer issues as the reason.
I recently decided to give the 7 day switching service a whirl and see whether the service was as seamless as advertised.
Well; my outgoing bank was Smile the internet bank, and the incoming bank was in fact not a bank, but the Nationwide Building Society. Opening the Nationwide account online was a doddle, with round five pages of relatively simple questions being asked including name, address, and employment details. I was immediatey accepted for the account, and the nice to have was the fact that the account details were given to me right at the end of the application.
A couple more pagesof information regarding my Smile account were needed including account details and debit card number and all was done. A completion date of 1st October was given and I immediately received a text message congratulating me on joining Nationwide and deciding to switch.
Already having an account with Nationwide, I was able to see the account online in a matter of days, and the overdraft granted is of course, very handy.
Three working days in to the switch I was able to see my online bill payments appear from Smile on the Nationwide account, and at that point I decided to rename some of them because the names I had given in the past were somewhat cryptic. The standing orders also appeared at the same time.
Direct debits began to appear on day 6 of the switch and at that point I saw an unrecognised Direct Debit Instruction. It turned out that the switch had somehow awoken a closed Mastercard account I'd had with the Post Office, and this was sorted quite quickly by simply cancelling the offending instruction.
Working day seven saw the balance of the old account transferred across to the new account, however later in the day, I logged back into Smile to find that the account had gone overdrawn as a payment in had disappeared. After a couple of calls back and forth between Smile and Nationwide, the credit reappeared on the Smile account bringing the balance back to zero and the account eventually was closed off on the 3rd October.
Clearly there are still one or two slight gitches, particularly with the communication between the two organisations where there was a problem (Natiowide said to speak to Smile and Smile said speak to the person paying me) however, overall the service does what it says on the tin, with the service being relatively seamless.
Two things to remember here; (1) I chose the full switch here which has a full guarantee if things go wrong - for those that don't want to fully switch (i.e. only move Direct Debits and Standing Orders across, you can 'partial switch' but that comes without guarantees and (2) there's still nothing stopping you doing a switch yourself by calling up all your payers and payees and just moving everything across manually. That said, if you are looking for account opening incentives for switching, it's unlikely these will be granted unless you opt for the full switch.