Video: Paul Clitheroe on account switching

Video about switching bank accounts

Video transcript

I find the typical Aussie household throws away around four thousand dollars a year by not having the right mortgage, credit cards, insurance and of course bank accounts.

Four thousand dollars is a heap of money. Let's take transaction accounts, the ones we typically pay our salaries into and pay bills out of. Some banks, credit unions and building societies charge account keeping fees others don't. Some pay you a little interest but plenty will pay you none. Some hit you with charges if you make more than say 10 transactions a month.

The fact is some transaction accounts are simply better for you than others. So why not switch to the best one. Well up until now switching accounts was an absolute hassle. You had to individually contact all the organizations that automatically debit and credit your account and give them your new account details, making it really painful to switch to a better account.

But that's changed with Australian government banking reforms in effect from 1 July. Switching I'm pleased to say, has become a whole lot simpler.

All you do now is go to the new financial institution you've chosen. It could be a bank, credit union, or building society and fill out just one form and they will do all the work contacting the institutions you have automatic debit and credit arrangements with, giving them your new transaction account details.

Your new financial institution can also help you to get a list of your automatic debits and credits from your old institution if required. So, if you're not happy with your existing bank account, shop around and once you find a better account sign up and get them to handle the messy details. Switching accounts has never been easier.

So do yourself a favour and find out more about this reform and others. The MoneySmart website, which is terrific by the way, has more information and has great tools to help you make and save money. Or you can check out more videos on the banking reforms YouTube channel.

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Last updated: 09 Aug 2016