A woman wearing a white shirt and pale pink head covering sits in front of a laptop holding her bank card in one hand as she learns how to switch bank accounts

How to switch bank accounts – make easy money for switching banks

Banking / May 25, 2022 May 25, 2022

Last Updated on May 25, 2022

Switching bank accounts is something that has become increasingly popular in recent years. Gone are the days of sticking with one bank for most of your life just for the sake of it.

It has now become the norm to try out multiple banks, either because of the perks that are now offered by many high street banks, or my favourite reason – to make some easy money.

Loyalty rarely pays these days, but switching definitely can, with banks currently offering up to £175 just for switching your account over to them. It can be pretty lucrative to jump ship, particularly if you plan on repeating the process to grab multiple bonuses.

In this article we’ll dive into all of the most popular questions I get asked whenever I talk about making money from switching banks, as well as my top tips for making the process as easy as possible. So if you’re wondering how to switch bank accounts, keep reading!

Table of contents

Is switching banks worth it?

Switching banks is definitely worth doing if you’re looking to give your savings a quick boost by making the most of bank switch incentives.

I’ve personally made over £1000 just from switching bank accounts, and it has hardly taken me any time. If you like making easy money for very little effort, then bank switching bribes are a no brainer.

You may also consider switching banks if you’re particularly unhappy with the service provided by the bank you’re currently with. If you were considering leaving your bank anyway, the money offered is a nice bonus!

Can anybody make the most of switching bonuses?

Most people will be able to take advantage of switching bonuses. As long as you have a good credit history and don’t usually have trouble opening bank accounts, you should be good to go. 

But do be aware that if you apply to open an account and get rejected, this will impact your credit rating. 

If you have a poor credit history, low income, history of bank charges or unauthorised overdrafts, fraud history, or have been declared bankrupt you may find it difficult to open a bank account. Money.co.uk give more information on the reasons why you may struggle to open a bank account, and what to do if you are refused.

How difficult is it to switch banks?

Switching banks is really easy. It’s as simple as filling in one form, which usually takes about 5-10 minutes. Once that’s done, you’ll find out whether or not you’ve been accepted for the account, and if you have, the banks will take care of all of the switch behind the scenes within 7 days.

All you have to do is find the best switching deal, decide whether you’re likely to be accepted, and fill out an application form online. It’s one of the easiest ways to make money online there is!

How do I switch bank accounts?

Switching your bank account is a really straightforward process, and it shouldn’t take up more than about 10 minutes of your time. Here are the steps you’ll need to take:

  1. Shop around for your new bank account

Shop around to find the best bank accounts on the market. MoneySavingExpert has a regularly updated guide that compares the best bank accounts, as well as the switching bonuses offered.

  1. Apply for your new account and initiate the switch

In order to initiate the switch, you will need to apply for the specified account with the bank offering the switching bribe. You will then need to apply to switch to that account from another bank either during the switching process, or once the account has been opened (check the terms and conditions of every offer to see which is the best option).

  1. The switch guarantee service will take place

The new bank will then get to work behind the scenes to work with your old bank to transfer all of your direct debits and standing orders, plus any money held in the account. This process should take no more than 7 days.

  1. Wait for your bonus to be paid into your new account

Once the switch is complete, you will then receive your switching bonus. How long this takes will depend on the terms of the specific offer, and can vary from immediately after the switch completes, to 30 days, or somewhere in between.

When requesting the switch you will need to enter the details of the account you are switching from. This usually includes your debit card number, so this is something to note if you are planning to use a donor account, as you will need to wait for your debit card to arrive before you can start the switch, unless you choose a bank that allows you to see your card details within their app or online banking facility.

My top tips for making bagging switching bribes a breeze

Here are a few tips on how to make switching as easy as possible, especially if it’s something you want to continue to do on an ongoing basis.

Use a donor account

If you plan to switch bank accounts regularly to bag as many switching offers as you can, using a donor account can make things easier. I’ll go into more detail about donor accounts later in this article.

Read the terms and conditions carefully

Always read the terms and conditions of every offer you’re considering applying for, and, if you do apply, save a copy somewhere. This way you won’t forget things like how long you need to keep the account open for, or how long you’ll have to wait for your bonus to be paid.

Keep a list of account opening and closing dates

Lots of switching bonuses have terms such as “must not have held an account with us since 2019” or “within 18 months” or some other time period. If you keep track of when you last closed an account with each bank, you’ll be able to easily work out when it’s worth trying the same bank again in the future.

Space out applications

One thing that has an impact on your credit rating is applying for lots of products within a short space of time, so it’s a good idea to leave a couple of months in between switching bonus bagging.

Keep an eye on your credit rating

As well as spacing out your applications, it can be a good idea to regularly check in with your credit rating to see what it’s doing and how applications are affecting it. If you notice it’s taken a dip, you can wait until it bounces back before applying for anything else.

​​How many times can you switch bank accounts?

You can switch bank accounts as many times as you like, though there will be a limit on how many times it’s useful to do so. 

Once you have bagged all of the available switching bonuses you may find that you are no longer eligible for more, since the terms often specify that you cannot have been a customer within a certain time period. Once this happens, you may have to wait a few years before switching again.

This brings us on to a related question – how often can you switch bank accounts? It’s generally a good idea to spread out your applications for any financial product, to avoid looking too eager to lenders. One application every three months is often quoted as a good rule of thumb.

But that’s not to say that it’s not possible to switch several times in a row, in fact I have done three at a time before and been accepted for them all. This will very much depend on your creditworthiness and how likely you are to be accepted.

Does switching bank accounts affect credit score?

Applying for a bank account can have a short term impact on your credit score, but for most people, this won’t be a big issue, and your score may not dip at all, or only dip a tiny bit and bounce back very quickly. 

However, if you are planning on applying for a mortgage in the next few months, it may be worth waiting. This is because when you apply for an account, a credit check will be done. This will be what is known as a hard search and will show up for future lenders on your credit file. Lenders typically don’t like to see too many applications close together.

Another way that switching banks can affect your credit rating is if you’ve held your current bank account for a long time. Having a long-standing relationship with a financial institution is seen as a positive thing when lenders are looking at your credit report, so by ending one that you’ve had for a long time, you may look less attractive.

This may not be an issue if you have more than one long-standing relationship, for example, you may have a credit card that you’ve held for years and years. You can also get around this issue by using a donor account and keeping the main bank account that you’ve held for years open.

You don’t need to worry about the risk of missing payments, since your direct debits and standing orders will be transferred over as part of the switching service. The Current Account Switch Guarantee means that any charges or fees that might be incurred if anything goes wrong will be automatically refunded, and your credit rating will also be protected.

Screenshot showing current account switch service terms
Source: Nationwide

How switching bank accounts has affected my own credit rating

From my own personal experience, my own score usually only dips very slightly when I apply for any financial product, even a mortgage. The only time it dipped significantly was when I (successfully) opened 4 different bank accounts, and 1 credit card within a 4 month period. It dipped 141 points during that period but recovered 30-40 points each month after I cooled off on new applications.

For context, my Experian credit score is usually 999 or in the high 900s, and has never dipped below 840. Because I know that I have a robust score to begin with and I am attractive to lenders for a variety of reasons, I know that my credit rating can take a temporary hit like this.

Graph showing the impact of applications on my credit rating since 2018

It’s also worth noting that at some points my credit rating has dipped for seemingly no reason, and there have also been several instances where I’ve taken out a new credit card or opened a new account somewhere and not seen any change whatsoever when it comes to my credit score.

The score itself is really just a guide for us consumers to give us an idea of where we stand, and prompt us to check our credit file if we notice a change to make sure that everything is correct. 

Lenders will not actually look at the number, but rather the things that are on your report, the types of accounts you hold, how many hard searches you’ve had over the past few months, and other factors.

What do I need to look out for in the terms and conditions?

When considering any bank account switching bonus, make sure you always read the terms and conditions carefully before you apply, and consider saving a copy to refer back to.

The terms and conditions of every switching offer will vary, so it’s important that you don’t skip doing your due diligence. The terms for an offer are unlikely to be exactly the same as those of a previous offer, even with the same bank.

So what are some things that you should look out for in the terms and conditions of bank account switching offers? 

  • How many active direct debits or standing orders you need to qualify for the bonus
  • Whether there are any minimum pay in requirements
  • Whether there are any minimum income requirements
  • Whether you qualify for a bonus if you have already received a switching bonus from that bank in the past
  • How many months or years need to have gone by since you last held an account with that bank
  • Whether you can have held an account with, or received a switching bonus from, any other banks that fall within the same group (many banks are owned by the same institution, for example, Bank of Scotland, Halifax, and Lloyds Bank are all part of Lloyds banking group)
  • How long you need to keep the account once you have opened it
  • Whether you need to request the switch during the application process, or wait until the account is fully open before initiating the switch

The above list is not exhaustive, but I think that covers most of the variables that I have seen over the last couple of years.

This might sound super complicated, but not everything on that list will apply ever time. For example, some switching bribes are literally as simple as switching an account with no direct debits to the new bank. 

Can you keep your existing bank account open when you switch?

Yes. During the application process when setting up a new account to switch to, you will be asked whether you want to keep your old account open but transfer your payments (a partial switch), or let your new bank close it as part of the switching process (a full switch). 

When it comes to switching bonuses, you usually have to make a full switch to qualify for the bonus. You will also not be covered by the current account switching service guarantee unless you do a full switch.

Be sure to read the terms and conditions of every single offer you want to make use of carefully, as they will tell you whether or not you can keep your old account. I have personally never come across a single offer that was okay with a partial switch where you keep your old account, but they may exist occasionally.

If you do want to keep your old account, you could instead consider opening a second bank account for the sole purpose of making the most of switching offers, often known as a donor account.

Can I access statements after switching?

Sadly once you’ve switched and your old bank account has been closed, you will no longer be able to access your old statements through online banking. For this reason, it’s a good idea to save a copy before you request a switch if you think you will need them for any reason.

This can usually be done easily in online banking, and you can often download a whole year’s worth of transactions in one go in just a few clicks.

You can contact your old bank to request your old statements after your account has been closed, but bear in mind that they may charge for this.

Should I set up a separate bank account just for switching?

If you plan to make the most of as many switching bonuses as possible, it can often be easier to have a new, separate account that you use just for switching, known as a donor account.

This is what I have done every time I’ve done a switch. I find it a lot less admin, and because I want to be ready to bag any new switching bribes as soon as they come on the market, I have a donor account set up and ready to go at all times.

Another reason to leave your old bank account open might be because you’ve been with that bank for many years. Having a long relationship with a financial institution is actually great for your credit rating, provided that relationship has been a positive one.

What is a donor account?

Essentially, a donor account is just a basic current account that you open just for switching.

You can have several different current accounts with different banks, so as long as you’re happy to keep track of more than one bank account and make sure you’re paying in enough every month to keep the direct debits from bouncing, this is very easy to do.

If you already have a current account with one bank, you can often open a second, basic current account with them via online banking in minutes, and since you already bank with them they usually don’t run a new credit check on you either. Alternatively, digital banks like Monzo or Starling can be quite quick and easy to set up.

Whichever option you choose, once your new account is open you’ll want to check the terms and conditions of the switching offer you want to use, to check whether you need to set up direct debits or not.

Some banks don’t specify that you need any direct debits to be switched during the process, while others will want 2 direct debits, and some are happy with a mix of direct debits and standing orders. The most common variation is 2 direct debits, so that is what I usually keep attached to my donor account as it tends to cover most bases, but do be sure to read the terms and conditions every time.

Do all direct debits qualify for switching bonuses?

For most switching bonuses, the direct debits that get switched as part of the process need to be classed as active. And, while technically any direct debit that has been taken in the past 12 months could be classed as active, most banks will want it to be a direct debit that is taken monthly. It’s safest to discount quarterly or annual direct debits.

To cover your bases, try to go with direct debits that come out of your account on a monthly basis, and make sure that they have been taken out once before you try for the switch. I have had luck with just setting up a direct debit and then immediately switching once it shows up in online banking as being set up, but I think it’s safer to let it be taken once. 

After all, if you open the new account and don’t qualify for the switching bonus, the account itself will still be opened, meaning you’ll usually need to wait several years before you can attempt a switching bonus from that particular bank again.

What if I don’t have enough direct debits to qualify?

Once you get into the idea of switching bank accounts, you may find yourself in need of more direct debits in order to qualify for the bonuses you want to bag.

This might be because you prefer to have all of your bills coming out of one bank account and don’t want to move any of your existing direct debits to your donor account, or if you want to make the most of more than one switching offer at the same time and need multiple lots of 2 direct debits. 

If you don’t have a lot of direct debits set up, or some of your monthly payments are recurring card payments, there are a few options or workaround that you can try.

Credit card direct debits

If you already have a credit card, perhaps if you’re working on boosting your credit score or you’re a fan of cashback and reward credit cards, or if you’ve been considering getting one, the direct debit you set up for your monthly payments will count towards a switching bonus.

It’s a good idea to have a direct debit set up to pay off your credit card in full every month anyway, to ensure you don’t find yourself getting into debt, but in order to be sure it will definitely qualify as active, you’ll need to make sure your card is being used at least once every month.

You could theoretically just make one purchase every month on your card, and let it get paid off (for example if you fill up your car with fuel once a month, you could always use your credit card for that and then pay it off in full). However, there is a risk of forgetting to do this one month.

Another option is to set up a recurring payment on your credit card, which can also be a great way to get around these types of payments not counting, and do away with the admin of having to remember to change your card details with the provider.

These payments include streaming services, membership schemes, or subscription boxes.

Paypal direct debits

If you use Paypal, you may have noticed that you have a Paypal direct debit set up, though no money will be taken unless you actually use Paypal to purchase something.

This means that your Paypal direct debit may not be classed as active, but you can get around this by making sure there is activity at least once a month.

You can use Paypal to pay for some regularly recurring payments such as Spotify, which is a good option if you don’t feel comfortable with the credit card option mentioned above.

You can also add money to your Paypal account from your bank account as a direct debit within the app, which is quick and easy to do. However, you will need to remember to do this manually each month.

If you do choose to use the Paypal direct debit, remember that no matter how many different things come out of your Paypal account via direct debit, the direct debit only counts ONCE.

Savings or investment account direct debits

Some savings accounts or investment platforms allow you to set up a regular direct debit to regularly add money to your account each month, which is a fantastic way to automate your savings, and it’s also great news if you need a direct debit.

There aren’t many out there, but a few that do offer direct debit options at the time of writing are Vanguard, Plum, or Moneybox. 

Charity direct debits

If you already give to charity, or if giving is something that is important to you, then you may want to consider setting up a direct debit to a charity that you believe in. 

Most charities will require a minimum of £2 a month, so consider whether this ongoing payment fits into your budget, but if you factor this spend in, you’ll still usually be making money from most switching bonuses that outweighs this small cost.

You may already be giving via payroll giving, but if you need to meet direct debit requirements, it might be worth considering switching to setting up a direct debit instead.

What if my monthly salary is lower than the required monthly pay in amount?

In order to qualify for some switching bonuses, the terms and conditions may state that you need to pay a certain amount of money each month into your new account. Or perhaps the account you need to open requires you to pay in a certain amount each month to avoid a fee. This amount may be more than your monthly salary in some cases, so what can you do?

Sometimes this problem has a very simple solution. Lots of bank accounts with a minumum monthly pay in to avoid a fee will allow you to simply move money in and out of the account until you meet the threshold. I have held a Club Lloyds account for years, as an example, and I have moved money in and out every month to avoid the £3 charge but still get the perks.

What I’ll usually do is transfer £500 in and out three times, because the required pay in is £1500. You could do a smaller amount and move it in and out more times, but I just can’t be bothered with the faff, and I usually have at least £500 left on payday.

You also don’t usually need to leave that money in the account, it just needs to have gone in. There’s nothing to stop you moving it straight back out and leaving the account with just enough to cover any required direct debits, if you wanted to (although some bank accounts do have a minimum balance – once again, always make sure you read the terms and conditions).

However, some banks are a little bit fussy, and may reject you based on your income (which you need to tell them when you apply for the account). This feels elitist and unfair, but it’s within their rights to do this. The banks that I know have been known to do this are HSBC, M&S, and First Direct. 

I once applied for the HSBC account for a £175 switching bonus, only to be told I didn’t qualify for the account I’d applied for, and had been given a basic account instead. This was a bit of a pain because it meant that I only got a £75 switching bonus instead, but it was still free money. However, both of those offers were advertised, and I’d known that the worst case scenario was that I ended up with £75. I haven’t seen them offer a switching bribe on any of their basic accounts since, sadly, so make sure you check what the terms are and which offers are available.

How long do you need to keep the account you switch to open for once your bonus has been paid?

As with most of the terms of these offers, the answer is – it depends. Read the terms and conditions carefully and check whether they mention that you must keep the account open for a certain amount of time.

Unless specified otherwise, you’re fine to switch as soon as you’ve got your bonus. I have done so several times without issue, just initiating a new switch as soon as I received the bonus from my newest account.

Occasionally some banks will offer a two-part incentive, with an initial amount of bonus paid once your switch is complete (usually the biggest chunk) and an optional second part paid if you keep the account for a certain time period, and meet certain conditions. 

For example, I did a Natwest offer where I got £125 for switching, and could then either switch elsewhere for another offer, or keep the account open for a year and receive an extra £50. 

Do you need to let your employer know if you’re switching bank accounts?

As per the terms of the Current Account Switch Service guarantee, the switching service will not only take care of switching your outgoing payments, such as direct debits and standing orders, but also any incoming payments such as salary or benefits.

Any payments accidentally made into your old account after the switch will be automatically forwarded to your new account for 13 months after the switch. The bank will also contact whoever made the payment to let them know, and give them your new details.

So this means that you don’t need to do anything, and your bank should handle everything for you. However, if you would like to let your employer know, there’s no harm in doing so.

If you feel more comfortable with the idea of using donor accounts and leaving your existing accounts alone, that is also an option.

Will all my payments still be taken as usual?

For direct debits and standing orders, the answer is yes. These payments will be automatically moved to your new bank account, and taken as usual. You don’t need to do anything to make this happen.

However, for payments that are recurring card payments, rather than direct debits or standing orders, you will need to change these manually yourself. 

Recurring payments, also known as continuous payment authorities, are the type of payments you set up by entering your debit card details, and these are not covered by the switching guarantee.

These types of payments often include:

  • Netflix
  • Spotify
  • Some gym memberships
  • Payday loan repayments

So don’t forget to change these yourself, if you’re switching an account where you have these types of payments set up. The first time I switched accounts I didn’t realise I would need to do this, and I got an email from Netflix saying my payment had failed and I needed to update my details. It was easily fixed and only a minor inconvenience, but it’s definitely something to watch out for.

It’s also worth noting that these payments will NOT count if an offer requires a certain number of direct debits or standing orders to be switched to qualify for the bonus.

Can I switch bank accounts if I have an overdraft?

A lot of people worry that they won’t be able to make the most of bank switch cashback offers because they’re in their overdraft. But, if you have a good credit score and haven’t gone over your overdraft limits, switching banks whilst in your overdraft should be possible. You should be able to move your account to a different bank, and your overdraft with it. 

Taking out an overdraft is one way that banks profit from your custom, so it makes sense for them to be happy to take on your existing debt, so long as you have a good record of repaying it. It may be worth reaching out to the bank you’re considering switching to if you do have an overdraft, as they may be able to tell you how likely you are to be approved.

Overdrafts are one of the most expensive ways of borrowing money, so if you’re prioritising paying yours off, a nice chunky switching bonus can go a long way to helping you be rid of it for good.

Money.co.uk have a great guide on switching bank accounts if you have an overdraft, which explains the process and what you should bear in mind.

Can I switch student bank accounts?

If you’re tempted by the allure of free money for switching bank accounts, but you’re a student, you’re probably wondering whether it’s possible or worth your while to switch your student bank account.

You technically can switch your student bank account, however you will only be able to switch it to another student account and there are restrictions on which banks will allow you to switch, with many not allowing it once you’re in second year. 

If you’re not happy with your student account, you can take a look at the best student bank accounts guide on MoneySavingExpert, which very helpfully lists all of the different perks, as well as breaking down which will allow you to switch.

But if you came here hoping to make £100+ from switching, you’re probably best off leaving your student account alone. The good news is, you can hold a regular, non student current account too. So there’s nothing to stop you from using a donor account, as long as you have a good chance of being approved.

Can I switch a joint bank account?

If you have a joint account with your partner or somebody you’re living with, you may be wondering whether you can switch that account. The answer is yes, you can switch a joint account, but both parties have to agree to it.

You can also only switch one joint account to another joint account, and it must be held by the same people. It is not possible to switch a joint account to a single person account.

There are occasionally switching bribes that apply to joint accounts, but in general you’d be better off if you both switch your individual accounts, as bonuses paid into joint accounts are still only paid in once. 

It’s worth keeping an eye out as occasionally these bribes allow you to switch an individual acocunt and a joint account without disqualifying yourself, meaning you could potentially bag the bonus 3 times – though these are sadly rare. It’s usually one bonus per customer, unfortunately.

Start switching today and bag those bonuses

Hopefully you’re now confident about the switching process, and ready to start switching bank accounts to make the most of the incentive money on offer.
If you do have any more questions that I haven’t answered, please feel free to reach out. You can contact me here, or reach out via DM on Instagram.

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