TIPS FOR PAIN-FREE ACCOUNT SWITCHING

Successful switching is all about timing, Ryan Prozesky, the chief executive of value banking services at First National Bank (FNB), says. To be safe, you should bank on it taking up to 45 days.

“Employers and companies that collect via debit order may have specific cut-off dates for changing banking details in order 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 (old) bank account,” Prozesky says.

For a smooth switching experience, FNB suggests you:

◆ Keep sufficient funds in your old bank account to cover one month’s worth of debit orders, to safeguard against the beneficiary/collecting company not processing the new banking details by the time the debit order runs;

◆ Check with your employer what the cut-off date is for your payroll department to be notified of a change in banking details, to prevent your salary from being paid into your old bank account; and

◆ Make sure you supply your new bank with the correct information about policy numbers and investment account numbers.

Prozesky says FNB sends customers SMS notifications when your salary and each debit order is moved. And at the end of each day, a full summary is sent via email to the customer. This keeps you abreast of where you are in the process and whether you have funds available to honour your regular commitments.

Sibongiseni Ngundze, the head of retail banking at Standard Bank, says upsets happen when the customer’s salary goes into the new account, but the debit orders aren’t all transferred in time – in which case debits continue to go off your old account, but you don’t have the funds to cover these, and incur penalties. Or the opposite happens: all your debit orders are moved across to your new account, but your salary goes into your old account. Again, you will incur penalties.

If you can’t keep sufficient funds in both accounts, you can ask both banks to give you an overdraft facility to cover you in the event of problems in the process. If you have to use this facility, it will come at a cost to you, but, in most cases, the cost will be negligible compared with the cost of declined debit orders.

Punki Modise, the head of transactional banking at Absa retail banking, says you should close your old account only once you are sure that your salary and all debit orders have been switched to your new account.