Seven-day switching, one month on: Q&A

The Payments Council, which is in charge of the new Current Account Switch Service, says 89,000 have switched in the month since the scheme launched, 11% up on the same period last year. But it's not exactly a sea-change, considering the huge amount of publicity surrounding the scheme.

For the majority who've tried it, we've heard providers have been fulfilling their promises to switch accounts in seven working days (see our Best bank accounts guide for the top deals).

Twitter user @KAnn173 wrote: "Switched from Santander to Halifax (and got £100!), all done in seven days – direct debits, wages, balance moved over, old acc closed. Very easy."

Meanwhile Facebook user Garry wrote on the MoneySavingExpert.com page: "Just changed from Santander to Nationwide. Pretty slick changeover. Bit soon yet to see if there were any glitches but all seems transparent. 12 days on, all my bills are being paid so far."Forumite sar0505680 commented on a switch from Lloyds to First Direct: "Have to say although I was a little worried that direct debits would be missed or payments would not go in, I am really happy and all my expectations have been met."

'Still not sorted...'

However, it's not been plain sailing for all. Faye wrote on Facebook: "NatWest switch from Santander. Still not sorted. Santander kept requesting further information, then last week stopped the switch altogether! Seeing NatWest manager this week to try and resolve. Had high hopes with it being such an easy online process."

Facebook user Kerry also reported issues: "Taken three weeks so far to switch from Yorkshire to Halifax and it's failed for the third time now. Honestly wish I hadn't bothered. I must have spent the £100 [switching bonus] in phone calls and petrol trying to sort it out."

Some of the MoneySavingExpert.com team also tried the scheme out. You can read how they got on in the Seven-day switching: Does it work? MSE News story.

How does the scheme work?

For full details on how the new scheme works and the key action you need to take if you're considering switching, see our updated Q&A below.

Is there anything I should watch out for?

Yes. The one thing we've learned from your feedback that we didn't know before is to beware that if the name or address on your old account doesn't match the details on your new account, or if you're switching from a joint account to a single account (or vice versa), then glitches may occur, and the process could take longer.

The best way to tackle this is to speak to your existing bank to ensure your details are correct before commencing the switch.

If anything does go wrong, any fees, charges or interest incurred as a result are refundable, but you'll need to ask your new provider to do this.

Recurring payments, also known as continuous payment authorities, are not part of the guarantee. These are set up using your debit card details, rather than your account number and sort code, and are often used for telecoms bills, gym membership and payday loan repayments.

So if you switch bank account, you'll need let the companies concerned know your new card details, though it can sometimes be hard to find a full list of these.

Also, when you'll get your debit card and Pin isn't covered by the guarantee. So despite your account being open and set up in seven working days, you may have to wait longer to access it.

The Payments Council says it's down to providers to ensure customers have their debit cards and Pins by or on the seventh working day of the switch.

What does it guarantee?

• For 13 months after you've switched, your new provider will arrange for payments accidentally made to your old account, or taken from your old account, to be automatically redirected to your new account. It will also contact the sender and give it your new account details.

• Your new provider will move payments going out, such as direct debits and standing orders, and those coming in, such as your salary, to your new account.

• If you have money in your old account, this will be transferred to your new account on your switch date.

• If there are any issues in making the switch, your new provider will contact you before your switch date.

• If anything goes wrong with the switch, your new bank will refund any interest (paid or lost) and charges made on either your old or new current accounts as a result of this failure. You'll have to ask your new provider for this, though.

• The service is free to use and you can choose and agree your switch date.

How long does the switch take?

The switch takes seven working days to take effect. You can select and agree a date with your new bank or building society that you want to start using your new account from and the process will start six working days (Monday to Friday excluding bank and public holidays) before that date.

I want to switch bank accounts. How do I do it?

Once you know which bank or building society you want to switch to, you just need to let your new provider know and it'll do all the work for you – you don't have to tell your existing provider.

Up until the seventh working day following you asking to switch, your existing account will function as normal. So all payments in and out will be taken or paid when they're due, and whatever money you had in your account will remain in there.

On the seventh working day after you've asked to switch, or on the switch date set by you – whichever is later – you'll have access to your new account. Once you do, you should see your balance has been transferred, and payments coming out, such as direct debits and standing orders, have been moved over.

Payments going into your old account, such as your salary or cheques paid in, will also be auto-forwarded to your new one, so you won't miss out.

From that seventh working day, you'll no longer have access to your old account.

Will my old account be closed automatically?

If you switch under the seven day guarantee your old account will be automatically closed for you as part of the switching process. You'll no longer have access to it from the seventh working day of the switch.

If you want to keep your old account open, you can't use the seven working day switch service. If you want to keep your old account open, you'll need to switch via a similar process to the older method. Here, it can still take up to 30 days to switch and your payments going in and out are not guaranteed to be redirected.

What are the top banking deals?

If you're always in credit, our best buy current accounts include top customer service bank First Direct* (minimum pay-in £1,000/month) and Halifax* (minimum pay-in £750/month), which each give £100 to new customers switching to them, and Santander's 123* account (minimum pay in £500/month), which pays 3% interest for those with £3,000 to £20,000, plus cashback of up to 3% on bills paid by direct debit – although it does charge a £2/month fee.

If you always go overdrawn, our best buys include the First Direct* 1st Account, which has a permanent £250 0% overdraft, Nationwide's* FlexDirect account (no minimum monthly pay-in), which has a 0% arranged overdraft for the first 12 months and the Halifax* Reward account (no minimum monthly pay-in), which has a 0% overdraft for the first six months, though after that charges are huge.

See our Best Bank Accounts guide for full information on all the top deals, including how they are for customer service.

Key questions answered...

I've switched. Do I need to set up my direct debits or standing orders?

No. As explained above, your direct debits and standing orders will be transferred over for you on the seventh working day and redirected for 13 months.

The person or organisation trying to debit your old account will be notified of the new account information so they can update their records and ensure subsequent payments go straight to the new account rather than the old one.

I've switched. Do I need to let my employer know my new details?

When it comes to something as important as your salary you should notify your employer as soon as possible about your new account details.

However, payments going into your account will be redirected to your new account for up to 13 months from your switch date.

And the person or organisation that is trying to credit your old account will be notified of the new account information so they can update their records and make sure subsequent payments go straight to the new account rather than the old one.

Does the seven working day system apply to all banks?

All of the UK's major current account providers are involved in the switching guarantee.

The 33 banks and building societies taking part include Barclays, Halifax, HSBC, Lloyds Bank, NatWest, RBS Santander and TSB. See the Payments Council website for the full list.

Is this just about switching current accounts?

Yes, the rules are just about switching current accounts – including basic bank accounts – not other banking or savings products, or mortgages.

Can I switch from a joint account to a sole account or vice versa?

Yes, but be aware it may take more than seven days. Seven-day switching works when switching like to like - joint accounts may make the process slightly more complicated due to additional ID requirements, permission from both parties to close or open accounts.

Can I switch if I'm overdrawn?

Yes. What you'll need to do with your old overdraft will depend on whether your new bank or building society can provide facilities to help you pay off any overdraft, which will be subject to the new bank's normal lending criteria.

If your new bank can't help with your overdraft, you must make separate arrangements to repay your old bank or building society what you owe.

But there are no exact rules in place about switching when you're overdrawn, what happens will vary by provider.

My name/address on my old account is wrong. Will this affect switching?

Yes - the process relies on the details you give for the new account, matching those on your old account.If there's a slight variation on your name, or your old account is registered to an old address, the process may be slowed to allow for checks.

Will switching affect my credit rating?

It can have an impact in the short term – especially if you're rejected, or you've tried to open a number of accounts in a short space of time – although for most, this shouldn't be an issue.

But if you're about to make a serious credit application, for example a mortgage, switch after that. This is because applying for a new account requires a credit check for the overdraft, which leaves a footprint on your file, and the fact you've got a long relationship (providing it's good) is a positive. So switch, and this takes a little while to rebuild. See our Boost Your Credit Rating guide for more help.

This credit check will take place before the seven-day switching period.

Other than that, switching won't have any effect on your credit rating, providing you repay any outstanding overdrafts on your previous accounts, as required by your old bank or building society. If there are any problems with payments during the process, your new bank or building society will correct them and ensure your credit rating is not affected.

What if I change my mind about switching?

You can cancel your switch seven or more working days before your switch date. So in practice, if you pick the earliest possible switch date, you can only cancel the switch on the same day you arranged it. After that, only certain elements can be cancelled.

The Payments Council suggests that if you change your mind during the seven-day switching process, it's actually better to let the transfer happen, and then use the service to switch back to your original provider.

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