In this article, we’re diving into how you can switch business bank account in the UK.
This will include the process to switch banks, the time it will take, and the different options available to you.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Switch Business Bank Account
- How Long Does It Take to Switch Business Bank Accounts?
- Frequently Asked Questions
- Ready to Explore Your Options?
Switch Business Bank Account
Switch business bank account refers to the Current Account Switch Agreement, which is a free service available to UK business owners. First introduced in 2013, it enables businesses to quickly change banks with limited effort. This service encourages businesses to seek out the best bank possible for their business, transaction requirements, and desired services.
Thanks to the increased competition, banking fees are kept lower, services are more competitive, and better terms are available for business banking. It also ensures that participating banks are unable to keep their small business clients captive with onerous account closure practices.
In practice, using this service to switch accounts means that the bank will do the logistical and administrative work for you. This includes re-routing payments and charges to the new account from the old account, which ensures that no payments or charges are missed.
Additionally, if any payments or charges are accidentally sent to the old account, they will automatically be sent to the new account moving forward.
Of course, there are degrees of account switching to choose from. These include the “full switch” and the “partial switch”. We’ll take a look at both options and how they differ in the following section of the article.
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How Long Does It Take to Switch Business Bank Accounts?
The process to switch business bank accounts takes seven business days to complete. This timeline is guaranteed when switching between participating banks and when completing a “full switch”.
The Process to Switch Business Bank Accounts
The process to switch a business bank account depends on whether you are selecting a full switch or a partial switch. Also, the timing will depend on whether you are switching from (or to) a bank that participates in the Current Account Switch Agreement.
Full Switch
The most straightforward option is the full switch, which results in all incoming and outgoing payments, including bills, salary, direct debits, standing orders, etc., being permanently redirected to the new account.
Importantly, the full switch is covered by the Current Account Switch Guarantee and will be completed within seven days. Additionally, any lost interest, fees, or payments that result from the switch will be reimbursed to the business.
Partial Switch
Because the partial switch does not include all transactions, the new bank will collect the information on all payments out of the account and give you the option to choose which you want to move over. Additionally, the old account will remain open and certain payments from the account will need to be changed manually instead of automatically.
Additionally, unlike the full switch, the partial switch is not covered by the Current Account Switch Guarantee and it takes longer than seven business days to complete.
Where Should I Switch My Business Banking To?
There are many business banking options if you have a UK-resident business. But, if you are opening non-resident business bank accounts, there are fewer options.
With this in mind, if you have a non-resident business bank account, you may want to think twice before closing it. Instead, you could consider opening a backup bank account and manually segregate your payments.
How to Choose Where to Switch Your Account
Of course, generally speaking, the most important factors that business owners consider before switching to a new bank include:
- Availability of services your business needs
- Costs to maintain your business bank account
- Fees charged for transactions (inbound and outbound)
- Foreign exchange fees (if dealing with foreign clients)
- Location of branches (for resident businesses)
- Ability to schedule and send transfers 100% online
- Availability of remote customer service
- And more…
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking into how to switch business bank accounts. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Can I Switch My Business Bank Account to Another Bank?
Yes, you can switch your business bank account to another bank in the UK using the Current Account Switch Agreement. This includes the Current Account Switch Guarantee, which protects your payments, and interest, and ensures that the switch is completed within seven business days.
Is Switching Business Bank Accounts Worth It?
Switching a business bank account may be worth it if the business owner has found a bank with similar (or better) services at a lower cost to the business. Importantly, if you have a stable relationship with your banker, you may want to think twice before switching. Likewise, if the business is a non-resident UK business, it may be worth opening a second account instead of completing a full switch and closing the original bank account.
Is It Legal to Have Two Business Bank Accounts?
Yes, it is legal to have two business bank accounts. In most cases, we strongly suggest that business owners open a second bank account. This second account acts as a backup in case something happens to their primary account. That way, the business can continue operating without interruption.
In fact, the only constraint is how many bank accounts your business will be approved for by each bank. Additionally, many banks have balance requirements, so it’s important to consider whether maintaining a balance at each bank is in the best interest of the business. Otherwise, you could end up maintaining multiple accounts, with minimum deposits, without receiving any additional benefits.
Ready to Explore Your Options?
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Of course, if you have any questions, please contact us directly.
