Switch? On or off?

There’s an interesting bit of research that I’ve mentioned before that shows that you’re more likely to change your partner than your bank account. It’s probably apocryphal but not too far from the truth. Part of the reason for this is that we are pretty lethargic about money, as we’ve said before. I talk to lots of people. For example, who still have their main bank account at the branch nearest the university they attended, not because it’s still giving great value, but because they can’t be bothered changing it. The other reason is that we believe that it will be too difficult to switch accounts because of the horror stories we have read about payments going missing and salaries not being paid to the correct account. The reality is that the vast majority of people who switch bank accounts have no problems at all but the few that do shout loudly and make us all think that it’s not worth the trouble.

If you are looking to switch, and you should be doing this regularly, new systems put in place at the end of last year should ensure that any switch takes place seamlessly and within 7 days. They should also ensure that:

  • The service is free and you can choose your switching date
  • The new provider will take care of switching regular payments going out, such as direct debits, and salary payments coming in
  • Funds in the old account will be moved on the switching day
  • For 13 months, payments accidently sent to the old account will be automatically redirected to the new account
  • If something goes wrong with the switch, any lost interest or charges that result will be refunded

We’re bombarded these days with information about switching things – loans, credit cards, utility companies, and told that it’s almost compulsory to do this regularly. If you’ve got a bank account that doesn’t do what you want it to do, or has become obviously uncompetitive then yes, move somewhere else. But don’t spend your days searching the internet for a different current account that shaves 0.1% off your overdraft rate or gives you free travel insurance that you don’t really need because you’ve got it elsewhere. Spend the time making sure you are getting value for the money you are spending rather than looking to get something ‘cheaper’ because we’re told cheap is good.

 

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