Family Budget

Switching bank accounts

Switching bank accounts

If you’re thinking of switching your everyday bank account from one bank, credit union or building society to another, you should consider the following advice:

Moving your everyday transaction accounts

Your everyday transaction account is usually where your salary goes in and it's the account where you:

  • withdraw cash
  • transfer money to pay your bills
  • use your ATM card
  • write personal cheques, and
  • organise automatic payments and regular direct debits.

The benefit of an everyday account is that it offers easy access to your money, but your money won’t earn much interest in this type of account.

All banks, credit unions and building societies are offering new transaction accounts and so it is worth shopping around for an account that gives you the facilities you want while keeping fees and charges at a minimum.

Preparing to switch accounts

Once you have chosen the right account for you, open the new account and then ensure that you update your automatic payment details, including:

  • Direct debits – these may include regular health and car insurance payments
  • Direct credits – these may include your pay or government benefits

How to switch accounts

Make switching banks and accounts easier by:

  • Set up your new transaction account. Leave your old transaction account open with some money in to cover any automatic payments that need to be made during the changeover period.
  • Ask your current financial institution for a list of all your regular direct debits and credits. It will give you a list of your automatic payments from the last 13 months. (You may be charged a small fee for this service.)
  • Take that list to your new financial institution. They will help you re-establish those payments on the new account. They will also help you to give your new account details to organisations that you pay or that pay you.
  • After you are sure all your automatic payments have been updated to your new account, you can safely close your old account.

Tip!

It pays to double check old account statements. Remember to check on automatic payments between your transaction account and other accounts, such as an online savings account or credit card account. Annual subscriptions or membership fees are another thing to watch out for.

Find more family finance advice and information

This article was created by Ella Walsh for Kidspot - New Zealand's leading parenting website. Sources include ASIC.