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Speedy bank switching?

Quick recap

The Current Account Switch Service was launched in September 2013. Since then, four million accounts have moved between banks, including 100,000 small businesses. The plan was to make the process of moving providers as simple as possible. To move from one participating bank or building society to another, you must have fewer than 50 employees and an annual turnover not exceeding £6.5 million. If you qualify the process is pretty straightforward: 99.3% of the switches have been completed within seven days (pre-2013 you would have been looking at 30 days). Go to http://www.currentacccountswitch.co.uk to see the process from start to finish.

Spoilt for choice

It’s easy to find a new bank these days, but which one should you choose? There are plenty of websites offering comparisons between the major players and some of the smaller ones. These will give you the headline rates and any fees, but you’ll obviously need to dig a bit deeper to get an idea of overdraft rates etc. Tip 1. There’s now more choice than ever when it comes to banking, and it’s worth checking out some of the “challenger banks” - these are smaller but often offer specific services for small businesses. Tip 2. Going with an online-only bank can often reduce your fees, but make sure you are comfortable with how easy it will be to speak to someone when you need to. Remember, you won’t be able to just walk around the corner and into a branch.

Peace of mind. The best thing about the switch service is that if anything goes wrong, e.g. you miss a payment and accrue charges as a result, you’ll be refunded. Payments to you will also be redirected automatically from old to new accounts, and any payers will be alerted to the details of your new bank. This means your customers won’t get miffed either. Tip. Once you’ve decided to switch you’ll only have to deal with your new provider. However, if you find a better service, fees, etc. elsewhere, then it’s always worth checking to see if your current bank can match them.

More good news

Even with the switch service you’ll need to gather some information and paperwork, but it might be easier than you think. The Competition and Markets Authority identified that one of the major barriers to SMEs switching banks was the process of opening the new account. So, in January 2018 many of the banks agreed a basic set of information that each bank needs from new customers to help them open or switch a business current account, e.g. personal information, number of staff, expected turnover, etc. Tip. There is an online guide that shows you the basic information you’ll need to open a new account or switch (see The next step ). So far 18 providers have signed up to this agreed checklist, but it will give you most of what you need for any potential change of bank, saving you time to-ing and fro-ing.

Don’t forget your savings. A fifth of SMEs keep all their cash in a current account where the interest rate will often be 0%. When shopping for a new current account consider a new savings one too. We found saver plans offering up to 1.9% for SMEs.

For a link to switching information, visit http://tipsandadvice-business.co.uk/download (CD 19.19.04).