Switching banks could become quicker and easier
Switching banks will be a breeze come autumn after Chancellor George Osborne pledged to cut the time it takes to change account to just seven working days.
The proposals will end the weeks of hassle customers expect to endure when they try to switch under the current 15-day rule.
Earlier this year, the Office of Fair Trading conducted a review into consumer banking and found the banks lacked "dynamism" and needed to do more to encourage consumer confidence in account switching. The regulator had concerns the complexities of moving accounts between providers were damaging competition in the industry.
Announcing the plans, George Osborne said he wanted to give consumers "the most powerful weapon of all - choice". And the new limit should act as a shot in the arm to banks that might rely on the inconvenience of switching to hold on to customers.
Craig Donaldson, chief executive of Metro Bank, welcomes the move. He says: "The seven-day switch is an important move that will do great good by increasing public confidence in the switching process.
"This process will kick other banks into gear and make switching even easier for our customers."
The move might also spark a run of incentives from banks to encourage new customers to switch, including cash deals and interest-free overdrafts.
How to switch accounts
1 Assess what you need from an account - if you are usually in credit, look for an account with a high interest rate, but if you are normally in the red, look for an account with a low-interest overdraft.
2 Once you’ve found a new bank, take two forms of ID, one with a photo and another with a proof of address, into a branch. You will need to fill in two forms - a new account application and a transfer form.
3 Once accepted, your new bank will then take some time transferring your standing orders and direct debits. When you are happy the transfer has gone smoothly, close your old account.
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.