Family finances are not static matters. Interest rates, fees and charges fluctuate all the time. Access to savings and funds vary too. Families who find themselves earning low interest rates, charged with high fees, and are generally unsatisfied with the services provided always have the right to switch banks.
Switching banks can be quite a hassle and time-consuming for busy parents, though. There are just too many things to do before switching bank accounts. In Australia, the government has made it easy for bank customers to switch their accounts to other banks or financial institutions through a package introduced on 1 November.
This package states that both the old and new bank must be ready to help customers re-establish their direct debit and credit arrangements from old bank accounts to new ones.
Here are four easy steps for switching banks.
Open an Account with a New Bank
First, shop around. Check and compare interest rates, fees and charges, access and other facilities. Once you’re happy with the choice, open a transaction account with the new bank.
Identify Regular Payments from Old Bank
Then, identify regular payments from the old bank account. Ask for the list of regular credits and debits over the past 13 months. These should include regular or periodical debits such as rent, mortgage repayment and insurance premiums as well as direct credits such as salary, government benefit payments and tax refunds.
Identify also “pay anyone” payments, payments that you make using online banking service for various payments – kids’ allowances, groceries, monthly transfer to the spouse’s account, etc.
Most Australian financial institutions can provide the list of regular payments from an account upon request. If such a service is not available, get this list from your monthly balance statement.
Re-Establish Payments on New Account
Take the list of regular payments to the new bank. Make a request to re-establish regular credits and debits on the new bank account. This will involve completing forms to advice each organization or merchant of the new details.
In the meantime, check that there is enough money in the old bank to ensure regular payments are made until these have been successfully updated and re-established with the new bank.
Close Old Bank Account
To make sure that all payments have been re-established on the new account, check the new statement when the expected regular debits and credits are due. If everything is in place, you can safely close the old bank account.
All households will benefit from switching to transaction accounts that truly suit their needs. Four important steps are involved when making that change. First, open a new account. Next, identify regular payments from the old bank. Then, update payments on the new account. Lastly, close the old account.