How to Move Direct Debits to Another Account

Coronavirus (COVID-19) banking update

Applications for payment holidays have now closed but banks are still offering tailored support to customers who are affected by the coronavirus outbreak.

• Find out more: Covid-19 payment holidays end: how to get help with your finances

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How do I switch bank accounts?

Most banks have agreed to use the new switching service, which means it should take just seven working days to switch you over from your old account once the new account is opened.

If you want to check which banks and building societies are participating, you can search by name here on the Current Account Switch Service (CASS) website.

The switching service is largely automated. The step-by-step process below details exactly what happens.

Step 1: Find your new bank account

This short video explains how to find a current account that's best suited to your needs, or you can skip to our advice on choosing the best current account below:

Step 2: Apply for your chosen account

When you apply to the new provider, it will undertake its normal account-opening procedures.

Banks and building societies have to comply with strict money-laundering rules so, when you open an account, you'll be asked to provide two separate documents for proof of identity and proof of address.

You will then need to complete a 'Current Account Switch Agreement' form and a 'Current Account Closure Instruction' form, provided by your new bank or building society,

Step 3: Know your rights

Your new bank or building society will confirm whether it is using the current account switching service which is backed by the Current Account Switch Guarantee.

This guarantee means that they will correct any problems with payments as a result of the switching process.

Step 4: Choose a switch date

You will be able to agree a convenient switch date for you with the new bank or building society.

It can't be a Saturday, Sunday or bank holiday, and must be at least seven working days after your account has been opened.

Once this date has been agreed, your new bank will provide confirmation that the switch has begun and will be completed on the agreed switch date.

You will continue using your old current account up until the agreed switching date, though don't set up new payments such as Direct Debits and standing orders during the seven working days leading up to your agreed switch date.

Your new provider will contact you if there any issues during this period.

Step 5: Start using your new account

On the switch date, your new bank or building society will be responsible for moving your incoming and outgoing payments, and transferring any money to your new account, before closing the old account and sending confirmation that the process is complete.

What if I have problems with the switch?

The Current Account Switch Guarantee outlines how the switching service works and what rights you have if anything goes wrong with the switch.

All providers offering the Current Account Switch Service will abide by these rules:

• The service is free to use, and you can choose and agree your switch date with the new bank.
• The new bank will take care of moving all your payments going out (eg direct debits and standing orders) and those coming in (eg your salary) to your new account.
• Your new bank will arrange for the closure of your old account and for the remaining balance to be transferred to your new account on the agreed switch date.
• For 36 months, the new bank will arrange for payments accidentally made to your old account to be automatically redirected to your new account. The new bank will also contact the sender and give them your new account details.
• The responsibility lies with the new bank to contact you before the switch date if there are any issues.
• The new bank must refund you for any charges incurred as a result of a direct debit or standing order not having been successfully transferred to the new account.

How to complain

If you run into any problems during or after the switching process - for example, if your bank fails to comply with the Switch Guarantee - you should complain in the first instance directly to your new bank.

If you're not happy with the answer you get or it doesn't reply to you within eight weeks, you can take your complaint to the Financial Ombudsman Service (FOS).

When should I choose to switch my bank account over?

Under the new switching service, it shouldn't matter what working day you choose to make the switch over to the new account.

However, if all your direct debits and standing orders go out around the same time every month, it makes sense to avoid switching on this day to minimise the potential for any problems.

Can I switch bank accounts if I'm in my overdraft?

Yes, having an overdraft isn't a barrier to switching but you'll need to pay off any debt with your old bank.

Whether or not the new account provider offers you an overdraft facility and whether or not it matches your current overdraft limit will depend on your circumstances.

If you've got an authorised overdraft and have a record of managing it well, most banks will consider taking the existing overdraft on.

If the new provider won't let you move your existing overdraft across, you can still switch but you will need to discuss a way of paying off your overdraft with your old bank.

Some may agree to keep the old account open to help you pay it off gradually but others may insist you clear the debt before you switch.

Can I switch if it's a joint bank account?

Yes, you can switch a joint account as long as both parties agree to do so.

You can only switch to another joint account held by the same people though - It's not possible to use the CASS to switch from a joint account to a sole account.

Will switching affect my credit rating?

Applying for multiple current accounts can affect your credit rating in the short term - because banks must run credit checks for the overdraft facility - but having one or two credit application searches will have minimal impact.

Ideally, you should spread credit applications out, so if you're applying for a mortgage or car finance it may be best to wait until you've secured this before switching bank accounts.

It can be beneficial to have a longstanding relationship with your bank when you apply for credit but lenders are far more interested in your actual credit history so don't let this put you off switching to a better bank account.

Find out more: How to check your credit score for free

Do I have to close my old current account?

No, if you don't want to close your old account, you can do a partial switch instead.

The main downside is that you aren't covered by the service guarantee, so you aren't automatically refunded for any charges incurred as a result of a direct debit or standing order failing to transfer properly.

It may also take longer than seven days to complete the switch.

And, the best switching incentives are often reserved for customers who use the full switch (CASS).

How to choose the best bank account

The Competition and Market Authority (CMA) published the final report of its retail banking market investigation in 2016. It proposed various measures to help make it easier for people to shop around and compare banking products, including:

• Forcing the largest banks - the CMA9 - to implement Open Banking so that customers can choose to share their data securely with other banks and third parties.
• Requiring banks to prominently display core indicators of service quality, based on surveys of personal and business customers.

The Financial Conduct Authority (FCA) has also told banks and building societies to publish information to help people make more meaningful comparisons between current account providers.

In these tables, you can also find out details such as the level of complaints made against the firm and how often the firm has had to report major operational and security incidents.

This should give you an idea of any banks that are lagging behind but the next step is to select a current account that works for you.

To help, Which? rates banks and building societies in terms of overall customer satisfaction as well as the individual accounts they offer:

Best providers for customer satisfaction

Every year, we survey thousands of current account customers and ask them to rate the service they receive to generate the Which? Customer Score.

Combined with our product analysis of each provider's best free current account, we use this score to choose the Which? Recommended Providers - banks that offer great products and top-notch customer service:

• First Direct has the highest customer score in our latest review, hitting the top spot with a customer score of 84%,
• Starling Bank is a close second with 83% and has the top star rating for customer service and communication,despite only being available as a mobile banking app.
• Nationwide Building Society scored 78% and was one of only two providers (along with Metro Bank) to earn a four-star rating for in-branch services. We also think it offers the best packaged account.
• M&S Bank is our fourth and final Recommended Provider, with five stars for online banking, transparency of charges, communication and overall customer service, bringing its customer score to 76%.

Find out more: Discover the best and worst banks as rated by customers

Top bank accounts for earning interest

High street banks tend to save their best interest rates for current account customers so if you're generally in credit, use a high-interest bank account to boost your savings.

You can even open multiple accounts and shift money between them to maximise returns.

Find out more: Earn credit interest from your current account provider

Top bank accounts for free overdrafts

If you need an overdraft to make ends meet, pick an account that offers a free or cheap overdraft.

Overdrafts are very flexible but avoid using one as a permanent form of credit  - an unsecured personal loan is more suitable for long-term borrowing.

Find out more: Best and worst bank accounts for arranged overdrafts

Bank account switching bonuses

We don't recommend switching just because a bank is offering short-term perks - we think you should focus on credit interest rates, overdraft charges and its Which? customer score.

But if you're already looking to move, it's worth seeing what incentives are on offer:

How to Move Direct Debits to Another Account

Source: https://www.which.co.uk/money/banking/switching-your-bank/how-to-switch-your-bank-account-a3xmb4z4z97t

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