When your current account ain't so current
Updated: Jan 18
WTF is this blog about!?
I've been with the same bank for my whole 'adult' life because it's just too much agg to change, right? WRONG!
I've just discovered a neat lil thang called Current Account Switch Guarantee - and it's taking managing your finances to a whole other level 💃
So this happened last week…
It's official: I'm no longer a 'grad' - cue mental breakdown 😰 And, whilst I’m a big advocate of changing your bills and savings accounts etc. every year to cut expenses or get a better rate, my immediate reaction to switching current accounts was f@*k that! Just the thought of updating my bank details on about a million subscriptions had me mentally exhausted - until I discovered the Current Account Switch Service!
What is The Current Account Switch Service?
It's a service allowing you to change banks without having to update all of your direct debits and standing orders - because your new provider will do this for you automatically!
Also - for 13 months after you've switched, your new bank will arrange for any payments that accidentally make it into your old account (i.e. when your mates ping you back the munz for a drunken Uber) to be redirected to your new one - handy, right!?
Plus - if anything goes wrong as part of the switch, meaning you miss a payment or are charged interest, your bank will refund you.
This sounds too good to be true, what am I missing?
The service is absolutely free and only takes 7 days - there are no catches! The one thing you should look out for though is recurring payments, which are similar to direct debits, but are set-up using your long card number rather than your sort code and account number.
You can find out which payments are recurring by doing a quick scan of your transactions via online banking. I noticed that my regular contents insurance wasn't listed as a direct debit - this means I'll have to update my bank details with the provider directly. Luckily, I moved flats this weekend, so this is a timely reminder that I need to cancel this insurance anyway!
Another thing to remember is that although incoming payments, such as your salary, will be automatically redirected (as well as the sender being informed about your change of bank details), it's probably wise to let your boss know you've moved accounts anyway so that you don't risk a delayed wage payment!
But who do I switch to!?
I’ve been with Santander for about 6 years now - I did my research before joining uni and found that they offered the best student account for me with a free overdraft, relatively high interest rates, some cashback perks and (most importantly at the time) a 3-year railcard worth £70! They’ve served me well - good rates, great customer service, I’m not complaining.
But, with my student account closing, it seems like prime time to check out the competition and, where current accounts are concerned, there are plenty of options. Some banks will pay a one-off joining fee, others offer interest-free overdrafts and a few will reward you with cashback for bills etc. - so in terms of who you move to, it's really up to your own personal preference.
For me, at this stage in my life, I'm really looking for convenience: I'm fed up of having to memorise multiple pass codes and memorable words to login to my account; I don't want to wait until I'm next going to the local high street to deposit cheques (who tf even uses cheques nowadays!?); and I shouldn't have to transfer money to another account, like Monzo, to access snazzy budgeting features.
So, for these reasons, I've chosen to switch to - *drumroll pls* - Starling*. I debated a lot between Monzo and Starling*; they're both very similar offerings. But, after some research, I found the key differences to be that Starling* offer:
Unlimited free withdrawals from foreign ATMs (this is capped at £200 a month for Monzo);
Interest on your entire balance (not just on saving pots); and
I'm not sure how often I'm going to use this feature, but this is the thing that really swung it for me - the ability to deposit cheques (less than £500) via the app.
If you've been stuck with the same bank forever assuming that it'll take a lifetime to move, think again! The Current Account Switch Guarantee is a real game changer!
That said, unlike bills, switching current accounts probably isn't something you want to be doing every year - because it is kind of a pain! So have a real think about what your priorities are and find a bank that suits those needs!
There are loads of Challenger Banks, like Starling* and Monzo, shaking things up in the banking industry - why not try one of these?
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*By using this link to open an account, I'll receive a small reward. Note that I only recommend companies that I either use myself or think are the best option out there IMHO.
Now for the serious part: my blogs are for educational purposes only; they do not constitute financial advice. Please consult with an independent financial advisor for advice on your specific circumstances.