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It used to be a complete nightmare to switch banks and accounts.  With your salary going in and a slew of direct debits going out every month, setting all that up with a new provider just seems like an unnecessary headache.

Switching is now easy

The great news is that switching is now super easy.  New government legislation that kicked in last year means your new bank will set up all your payments for you.

You don’t even have to give them any details yourself. Your new bank will contact your old bank, and get a 13-month list of all your direct debits, such as gym memberships and regular utility payments, as well as direct credits, such as your salary.

The new bank will then give you this list so you can choose what you want to move across. It’s also a great way to check that you haven’t got any old or erroneous direct debits still going out – such as a gym you no longer go to.

You can also authorise your new bank to give all of the relevant payees your new account details.

For payments that can’t automatically transfer, such as BPAY payments or recurring payments where you have supplied your debit card number, your new bank can show you how to sort these out as well.

Break the chains

Even worse than just putting up with a poor transaction account, many people end up sticking with their bank for other services as well, just because “it seems easier”

This may include adding a really expensive credit card, or uncompetitive home loan. They get locked into the brand, even from an early age.

And this is how banks get away with offering poor value products!

Reasons to switch

So why would you want to change?

Lower fees:  Australians waste over a billion dollars a year in avoidable bank fees and ATM charges.  Picking a bank with zero monthly fees and lower transaction fees will save you money. Bankwest’s Zero Transaction Account has zero ATM fees at Bankwest, Commonwealth, ANZ, NAB and Westpac ATMs Australia wide

Cheaper overseas transactions: Sick of racking up expensive fees on overseas trips and international online shopping purchases? You can now avoid them completely with the Citibank Plus transaction account which has no overseas ATM fees, no overseas purchase fees and no monthly fees to boot.

Better service: some banks offer really useful mobile apps and online tools to help you manage your money, such as ANZ’s Money Manager online budgeting tool, Westpac’s nifty Impulse Saver app and Commonwealth Bank’s swish Kaching mobile app with soon to come ‘tap and go’ mobile payments for purchases under $100.

Higher interest: some innovative banking providers are now offering everyday transaction accounts that pay up to 4.67% interest, such as UBank’s USaver Ultra transaction account.

All of these save you time and money, and it’s easy to search for and compare different bank accounts. And with the government’s helpful new legislation making it a breeze to switch, there’s no reason to stick with your old account.

 

Kirsty Lamont is a director of Mozo.com.au which helps Australians compare credit cards, home loans, insurance and other financial products.  Kirsty previously worked for Virgin Money in Australia and BankWest.  As a consumer finance expert and busy working mother, she has brilliant budget tips and creative ways to save money.
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