Question of the week: How does a current account change work?

Friday, 10.02.17 , written by Annabell Meyer Too complicated and too much paperwork: only a few bank customers still use the possibility of a current account change. A change is now much easier than expected. The banks are now even obliged to help their customers when moving the account under the arms. In times of low interest rates, a new account can save you money. >  A current account change is often easier than expected

What should be considered during a current account change?

In principle, bank customers can change or cancel their checking account at any time. You do not have to justify your decision and, as a rule, do not pay any notice periods . Because with the account these are rather uncommon. Even if account holders have agreed to a term in the terms and conditions, this may take a maximum of one month by law.

As soon as they have found a new checking account, they can take care of moving their money. Account holders wishing to switch without the help of the bank must themselves ensure that deposits such as salary and expenses, such as electricity bills, are made via the new account in the future. A brief written notice to the employer, the respective utilities, insurance companies and other payment partners is sufficient. If all important points are informed and the orders are transferred to the new account , the old checking account can be dissolved. For this purpose, a letter to the bank is sufficient, at which date the liquidation takes place and how the remaining balance is to be paid out.

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Banks need to support smooth current account swaps

Many banks have been assisting their new clients with the current account swap for some time now. Until a few months ago, this was still a voluntary service. However, since September 2016, the financial institutions are required by law to help with their account relocation or to facilitate a smooth transition. For this purpose, bank customers only sign an authorization form, which they receive either from their old or the new bank. Subsequently, both loan companies have to take care of the change together in a maximum of twelve days:

  • Within two days, the new financial institution must forward the authorization to the previous bank and claim the services listed therein, such as the closure of the account.
  • The old bank then has five days to pass on a list of all regular incoming payments, direct debits, direct debits and standing orders of the last 13 months to the competitors.
  • In turn, the new banking company sets up the requested standing orders within five days and informs the payment partners about the new bank details.

If the checking account change does not work without problems or lasts longer, both financial institutions are liable for any damage such as arrears or dunning fees. The only requirement for the bills of exchange service is that the banks are based in Germany and the accounts have the same currency. In most cases, no fees are due.

Current account change per app: Practical but insecure?

Some financial institutions now offer their customers a fully automatic current account change . This is done via the computer or via an app on the smartphone. There consumers log in with their access data for online banking of the current account, the rest takes over the software. At the end of the transaction, account holders recheck all listed orders and data before the change is done with a digital signature. However, data collection is done through an external company, which raises the question of how secure this process is. After all, the system reads out sensitive information. According to the providers, however, the highest privacy guidelines apply. Bank customers who still find the method too uncertain may continue to make the current account change in writing.

What options do customers have when checking current account?

The selection of checking accounts is huge, but many bank customers, it is important to pay nothing or as little as possible for the account . Free current accounts, however, are now in short supply due to the current low interest rate. According to Focus-Money magazine (7/2017), the DKB, ING-DiBa and Consorsbank are currently offering the top three online accounts for free.

Tip : Even if a checking account seems free of charge at first glance, hidden costs may be added. With the current account settlement calculator, willing to change easily find out which banks are imposing no additional fees.

Some banks even reward new customers with an exchange premium. Consumer advocates, however, warn that this should not be the crucial point for the account choice. Similar to insurance policies, it always depends on which services customers care about. Should the withdrawal of money, for example, be free on holiday? Or is it rather important for them to have a high level of corporate responsibility? Using checklists, customers can compare the characteristics of multiple accounts and see what they value most.

Of course, the type of bank also plays a role. Some customers prefer a classic checking account at a large German bank, where they like to get personal advice. Others prefer to regulate their money matters independently and use an online account with a direct bank. Another option is to change to a “green” bank . These financial institutions invest primarily in social projects and cooperate exclusively with ethically and ecologically sound companies.

Here are tips and more information about the investment. >

Annabell Meyer

editorial staff

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