KBC & UB customers’ switching questions answered - The Last Word
The Irish banking world has been shaken with KBC and Ulster bank leaving the Irish market, so, there’s a lot of confusion and panic around switching.
This doesn't need to be the case though.
Head of Communications at bonkers.ie, Daragh Cassidy, appeared on The Last Word to ease the minds of listeners and tell them what they need to know about switching current account providers.
Will current account holders have trouble switching?
It’s relatively easy to open up a new account online, which most banks will allow you to do online through their mobile banking app.
If you want to open a joint account or if you don’t have an EU passport, things can be a bit more tricky.
In these cases, some banks will need you to go into a branch where there are long queues of people.
However, the biggest issue is getting your direct debits and standing orders transferred over.
It’s not just the banks that need to be prepared either.
Utility providers that are receiving direct debits such as Electric Ireland, Sky, and Vodafone need to have their customer service teams ready to update their customer's details.
Electric Ireland, for example, said that in a normal year they might have 3,000 or 4,000 requests from customers to update their details. Now their requests are ten times those numbers.
How can KBC customers close their accounts?
Traditionally with KBC, you needed to have a written letter. However, this may change as they officially begin to close.
If you don’t close your account, it will close regardless after six months and you will receive a cheque with your remaining balance.
Will someone switching banks get the same overdraft?
Unfortunately, people switching banks will need to apply again.
This is because people’s financial circumstances could have changed, they might be:
- In more or less debt.
- Earning more or less money.
Another thing is that not all banks provide an overdraft, including:
Which bank or financial institution offers the best current account?
The best current account for you will depend on your needs and banking preferences. For example if you:
- Like using cash
- Need an overdraft
- Need Fitbit or Garmin pay
- Prefer a bank with a good mobile app
Then the right bank for you must offer these services. To discover the different benefits banks in Ireland have to offer, read our guide on the best current accounts on the market.
Is the switching code effective?
The switching code was implemented in 2016 and never worked properly.
Even at that, it was never intended to support around 500,000 customers switching bank providers at the same time.
I actually used the switching code and I had to do the majority of the work myself.
My advice to people is to ignore the switching code as it won't work.
If you want to learn more about how the switching code works, check out our guide on the topic. You can even get a first hand account of the manual switching process experienced by a member of our team here.
What will happen to your KBC credit card?
KBC is going over to Bank of Ireland, including mortgages and deposits. So in theory, customers won’t have to do anything.
With Ulster Bank, nobody is buying their credit cards. Of course, you can choose a new provider and transfer over the balance.
However, if you have bad credit and a new provider won’t accept you, you'll have to pay your balance before your account is closed.
Where should people go with their money?
Deposits with KBC are moving to Bank of Ireland.
However, with interest rates at an all-time low, maybe this is the time to look at different places to put your money, such as an investment fund.
Again, with Ulster Bank, nobody is buying their books so if you have savings with them you’ll probably receive a letter giving you six months' notice to move your savings.
Otherwise, you can expect a cheque or a bank draft in the post with your remaining balance and your account frozen.
Will my mortgage rate stay the same when switching providers?
Legally, your rate must stay the same when switching providers, whether you have five or two years remaining, and that goes for tracker customers as well.
Performing and tracker mortgages will be going to AIB and non-trackers and fixed-rate mortgages will be going to Permanent TSB.
Meanwhile, the new home of non-performing mortgages still needs to be confirmed by Ulster Bank.
Do you have to pay Government stamp duty if switching providers?
Government stamp duty is only paid on account closure, so it depends if you’re switching or closing your account.
If you’re switching, you should be able to get a letter from your previous bank confirming stamp payment for that year.
Some people might be reviewing their options and may have cancelled their credit cards altogether. If that’s the case, then those people will have to pay stamp duty again.
What do listeners need to know right now?
Don’t wait for a letter or email telling you to switch.
Start the process now, particularly for current accounts. The banks are overwhelmed as it is, so the more time you give yourself, the better.
It should be easy to set up a new account, it’s just the transferring of standing orders and direct debits that can take time.
Switch with bonkers.ie
Start comparing banking providers today for all your financial needs.
Read more about banking with our guides:
- There are 8 things to consider when choosing a new current account provider.
- This is how to switch your current account.
- Find out how to compare savings accounts.
Our free comparison tools for energy, broadband, and insurance will help you find even more great savings.
Easily compare, switch, and save with bonkers.ie today.
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