The new Current Account Switching Service goes live today, allowing consumers to switch change between participating banks in just seven days.
The launch of the new £750 million switching system will cut the transfer time between bank accounts from up to 30 working days to just seven working days.
Customers applying to a new bank can select a convenient switching date that causes minimal disruption.
The new bank makes all the arrangements, including the transfer of direct debits and standing orders. An automated redirect function will forward any inbound or outbound payment instructions from the old account to the new one.
The Switch Guarantee also ensures that customers are refunded for any charges if any problems arise during the process.
33 banks and building societies have already signed up (full list provided here), covering most of the existing current account market.
It remains to be seen whether the new system will encourage consumers to act, but it has driven banks to compete with their current account deals in recent months.
Nationwide and Santander are both offering attractive interest rates on selected current accounts, while Halifax and the RBS Group have recently added a cashback feature to their accounts (read more).
The Money Advice Service has predicted that switching consumers could benefit to the tune of £600.
Mark Fiander, an executive director at the Service, told the BBC that a move to cut charges or to gain interest on credit balances could mount up to £500 or £600.
Adrian Kamellard, the chief executive of the Payments Council, described the launch as "the beginning of a new era".
"Over the past two years multiple financial institutions have come together to design and implement this new, free and standardised service which will raise the bar internationally for retail banking," he said.
For more information, see our guide to the new Switching System. You can also check out the latest offers on our current accounts page.
Keith McDonald
Which4U Editor
If you enjoyed this article:
- Check out the latest articles on our Finance Blog.
- Sign up for our free e-newsletter.
- Follow us on Twitter for regular updates.
{loadmodule php,TwitterButton}