Yes, switching bank account can save you money, but the switching bonus is often the smallest part of it. The bigger, repeat savings come from dropping a packaged account fee you do not use, paying less overdraft interest, avoiding charges when you spend abroad and getting access to better linked savings. A switch through the Current Account Switch Service (CASS) is free and takes 7 working days, so the effort is small compared with what you can keep each year.
This guide focuses on those ongoing savings and how to use a switch to reset your money habits. If you want the mechanics of moving accounts or a run-down of how switch offers work, see how to switch bank accounts in the UK and bank switching bonuses.
Where the real savings come from
Before you look at any offer, work out what your current account is costing you. Most people find at least one of the following. Each one is a cost that repeats every month or every trip, which is why fixing it is usually worth more over time than a one-off bonus.
| Cost | Where to find it | What to do |
|---|---|---|
| Monthly account fee | Statement or account terms | Drop to a free account unless you use the perks |
| Overdraft interest | Statement, interest line | Compare overdraft rates or clear the overdraft |
| Spending abroad | Non-sterling transaction fees | Pick an account with no foreign usage fees |
| Low or no savings interest | Linked savings rate | Use the new bank's regular saver or move savings |
Check what your account costs you now
Download the last 12 months of statements and search for the words fee, charge, interest and non-sterling. Add them up. That total is the yearly amount a better account could save, and it gives you a clear figure to compare against any switch offer.
Packaged accounts deserve a close look. They charge a monthly fee in exchange for extras such as travel insurance, phone insurance or breakdown cover. They can be good value if you would buy those policies anyway and they actually cover you, but many people pay for cover they do not use or would not be able to claim on (for example, travel insurance with age limits or pre-existing condition exclusions). If you are not sure, price the same cover separately before you decide.
Overdrafts: usually the biggest leak
If you dip into your overdraft most months, the interest can easily outweigh everything else on this page. Since April 2020, FCA rules mean banks charge arranged overdrafts as a single annual interest rate with no fixed daily or monthly fees, and unarranged overdrafts cannot cost more than arranged ones. That makes overdraft rates easy to compare: check the rate on your current account against the rates on accounts you are considering.
Be careful when switching with an overdraft. Your new bank is not obliged to give you the same limit, and a full switch closes your old account, so any overdrawn balance has to be cleared or moved. Ask the new bank what limit it will offer before you switch, and plan to bring the balance down. Our guide to escaping your overdraft has a step-by-step plan, and the debt payoff calculator shows how quickly extra payments clear it.
Linked savings and regular savers
Some current accounts give access to a regular saver or a linked easy access account that pays more than your current bank offers. Regular savers usually let you pay in a fixed amount each month, often for a year, which suits anyone building a habit. Rates change often, so compare them at the time you switch rather than relying on old headlines.
Remember that the best savings account does not have to be with the bank that holds your current account. See regular saver accounts and our hub on high interest savings accounts, and use the savings rates comparison tool to see how much a better rate is worth on your balance.
Cashback and perks: only if they fit your spending
Some accounts pay cashback on household bills or card spending, or include perks such as fee-free spending abroad. These are worth something only if they match what you already spend. Work out the yearly value on your real bills, take off any monthly fee and minimum pay-in requirements you would struggle to meet, and compare the result with a plain free account.
Treat the bonus as a one-off, then put it to work
Switch bonuses are a real gain, but they happen once. Check the conditions carefully (minimum pay-in, number of Direct Debits, using the full CASS switch, and whether you have had a bonus from the same bank before). Then decide in advance where the money goes: an emergency fund, a debt, or a specific goal. Money that lands in your current account with no job tends to disappear into everyday spending.
How to switch without problems
CASS is free, takes 7 working days and moves your Direct Debits, standing orders and incoming payments to the new account. If anything goes wrong because of the switch, the Current Account Switch Guarantee means any resulting interest or charges are refunded. A few checks make it smoother.
- Use a full switch if you want the guarantee and most bonuses. A partial switch keeps the old account open and is not covered by the 7-day guarantee.
- List your regular payments from your statements first, including card payments set up with your debit card (subscriptions). These are not moved by CASS, so update them with each company.
- Expect a credit check when you apply for a new current account, especially one with an overdraft.
- Pick a quiet switch date away from payday and big bills, and keep a small buffer in the account while it completes.
- Download statements from the old account before it closes, in case you need them later.
Use the switch as a money reset
A new account is a natural moment to rearrange how money flows each month. Set a standing order to savings for the day after payday so it goes before you can spend it, separate bills from spending money, and set a short weekly check-in to look at your balance. Our guide to automating your savings walks through it, and the budget planner helps you decide the amounts. If you like a nudge to save a little more on top, SYM suggests an amount to put aside each day and lets you log it in one tap.
Frequently asked questions
Is it worth switching bank account just to save money?
Does switching bank account hurt your credit score?
How long does a bank switch take in the UK?
What happens to my overdraft when I switch banks?
Do subscriptions move when I switch bank account?
- bank switching
- current accounts
- overdrafts
- bank fees
- saving money