Many people are put off changing bank accounts because the admin that comes with switching accounts, such as changing debit orders and employer details. But, with a good understanding of the process and a few key aspects switching doesn’t have to be scary or difficult.
“There are various reasons why someone would want to switch bank accounts. These include changes in life stages such as the need for housing or vehicle finance, to access to better value-adds like full range digital banking or just because you need a change,” says Ryan Prozesky, CEO of FNB Value Banking Solutions.
According to the FinScope South Africa 2015 Consumer Survey, 6% of adult respondents switched banks last year.
In order for a smooth switching experience FNB suggests the following when you have made the decision to switch banks.
Choose your timing
“Switching is all about timing,” advises Prozesky. “This is because both employers and companies who collect via debit orders may have specific cut-off times for the next salary or payment to be processed to your new bank account.”
If this is not done in time, the salary or payment may be processed against your previous bank account.
“Check with your employer from which date your salary will be paid into your new bank account. Due to the fact that a number of employers have payroll cutoff dates, your next salary may still be paid into your previous bank account, with only the subsequent one being paid into your new bank account,” says Prozesky.
Keep sufficient funds in your old account
Customers should keep sufficient funds in their old bank account to cover one month’s worth of debit orders.
“This is to safeguard against the beneficiary or collecting company not processing the new banking details by the time the debit order runs, and to ensure that in the switching process a vital debit order isn’t missed,” says Prozesky
Provide the correct information
Of critical importance in the switching process is that the customer supplies their new bank with the correct information with regards to policy numbers, account numbers and their own contact details.
Some banks, such as FNB, will provide salary and debit order switching services for you to help take the hassle out of switching bank accounts. However, in certain instances some service providers or human resources departments won’t accept instructions from the bank, which means that you will have to submit the instruction yourself.
Take time before closing your old account
“While bank accounts can be opened in a couple of minutes, we suggest to be safe that customers bank on 45 days to complete the entire process from opening a bank account, to switching across all debit orders and transferring salary,” says Prozesky.
Because of the length of time that switching can take FNB provides customers with SMS notifications as each debit order or salary switch progresses through the process and at the end of each day a full summary of the customer’s request is sent via email. This assists customers in understanding where they are in the process and where they should have funds available to honor their ongoing financial commitments.