Do KBC & Ulster Bank customers have enough time to switch? - RTÉ Radio 1
The Central Bank of Ireland recently told Financial Institutions in Ireland that they must do more to support Ulster Bank and KBC customers switching to a new current account or savings account provider.
Almost one million account holders between both banks have been given six months to switch before their bank accounts are closed.
Is this enough time, and are there enough resources in place to support customers?
Head of Communications at bonkers.ie, Daragh Cassidy, spoke to RTE Radio 1 to offer his insight and advice to account holders.
Will six months be enough to switch banks?
If people switch accounts now, then in theory, yes.
The minimum notice that a bank is legally required to give to their customers when leaving the market is two months.
Ulster Bank gave customers six months from the beginning while KBC originally gave their customers 90 days.
Now, however, KBC has announced that they will also be giving their customers six months.
The fear I have is that people will leave it until the last minute and what I would say to people is absolutely do not leave it until the last minute, because it may take you a few weeks to switch.
How can customers switch banking providers?
There are two ways to quickly open an account with a new bank.
Firstly, there’s a switching code in place that requires your bank to help you switch to a new bank within ten days.
This code will help a customer to transfer their direct debits and standing orders to their new bank.
The switching code is not perfect though.
In normal times, the switching code sometimes missed direct debit transfers so this definitely won’t work when hundreds of thousands of people try to switch at the same time.
The second way, which is my advice to people, is to just open a standard account yourself and get that out of the way before looking into closing your previous bank account.
Most providers will allow you to open an account online in a few minutes.
However, if you have a joint account or if you don’t have an E.U. passport then you may encounter difficulties online and have to go into a branch.
What is your advice for switching direct debits?
At this time, people should switch all their direct debits one by one instead of relying on the one-stop shop.
Under the switching code, that one-stop shop is supposed to be there, but it never really worked.
It’s fine if you know what’s coming out of your account, but some people may not.
Ulster Bank and KBC should still help you to identify what payments are coming out of your account, but just be prepared to do some of the leg work yourself.
In some cases, the direct debit originator such as Eir, Vodafone, Sky, Electric Ireland, etc. won’t even accept a direct debit request from someone other than the account holder, which is another issue that may arise.
Will my mortgage rate be protected when I switch?
KBC is due to sell its mortgages to Bank of Ireland, which is still being reviewed by the Competition and Consumer Protection Commission (CCPC), while Ulster Bank is selling its mortgages to Permanent TSB, however, its trackers are likely to go to AIB.
Nothing changes in this regard.
If you want a tracker you’ll keep the tracker, if you want a fixed-rate mortgage, you’ll keep the fixed rate.
The only issue is that when you come to the end of your fixed rate with Bank of Ireland or Permanent TSB, you’ll be paying for the higher interest rates associated with these banks compared to the cheaper rates provided by Ulster Bank and KBC.
Switch and save on bonkers.ie
Before hastily switching to a new current account, you can review account features and find the best option for you on bonkers.ie. Our free current account comparison tool will allow you to see what’s on offer from Ireland’s main providers!
For more information on switching banks, we have fantastic guides for you:
- These are the 8 things you should consider when switching current accounts
- This is how to switch current accounts
- We also have a guide on switching savings accounts
Compare, switch, and save today with bonkers.ie.