Considering how much profit the big banks rake in, it's clear they aren't just looking after your cash as a feel-good community service. They're making money off your money, so it pays (literally!) to figure out how to get a little back.
You might have gotten comfortable with your current bank, but why settle for average when you could be swept off your feet by a dashing new account with lower fees and higher interest rates? Choosing a better account can save you money - so there's no reason to stick around if you're stuck with a poor performer.
There are three good reasons to consider switching banks:
- You're paying too much in fees
- Your current account pays little or no interest
- You're unhappy with the bank's service.
Breaking up is easy to do
Ready to move on? The good news is, these days it's a lot easier to give your bank the flick. Banking reforms introduced in 2012 mean your current and future providers need to do a lot of the hard work for you, without charging sneaky exit fees.
Step 1: Find a new account
With a mind-boggling number of accounts and providers on the market, this is where you'll need to do some homework. The basics you should look for in an everyday account include:
- No monthly fee
- No withdrawal fees at the bank's own ATMs
- Free EFTPOS purchases, without conditions.
If you need a little help, try:
Step 2: Open a new account
Yes, that's pretty self-explanatory, but make sure you go into this prepared. You'll need to provide the new bank with appropriate forms of identification to meet a 100-point check, and other details needed to set up the new account in your name.
Step 3: Contact your existing bank for a list of your automatic payments
You can ask your new bank to do this part for you, or do it yourself. Under the government's bank account switching package, financial institutions must provide a list of your direct credit and debits for the previous 13 months, to make it easy for the new institution to set up those payments.
Step 4: Set up regular payments in the new account
If you've gone the DIY option, give your new bank this list of your regular debits and credits. They should help you to re-establish those payments on the new account by providing forms to advise each relevant organisation of your new account details.
You'll also need to ask the new institution to set up other periodical payments. If you have direct debit arrangements with other merchants or utilities providers, for example, you'll need to advise them of your new account or card number. And don't forget to redirect your salary and other payments to the new account.
If you use internet banking to make "pay anyone" transactions, you'll also need to set up those arrangements on the new account.
Step 5: Ditch the old account!
But before you do, leave it open with some money in it for a short time to make sure no more payments are going in or out. Put some money in the new account to make sure there's at least enough cash to cover upcoming scheduled payments.
When everything is running smoothly, transfer any remaining cash to the new account, and close the old one permanently. Many banks are keen to hold on to your business, so you may need to front up and do this in person at a branch.