The Gillard government’s resolve to intensify banking competition came into effect on the first of July with the introduction of the tick-and-flick system for switching deposit and transaction accounts.
This is designed to make it easier for us to switch banks if we are dissatisfied with our current bank or we find that we can get a better deal down the road. Previously, the hassle of advising everyone about new bank details for automatic debit and credit transactions put a dampener on the idea of switching.
Basically tick and flick is where customers sign just one form that authorises their new financial institution to do everything for them. This includes arranging transfers of all automatic transactions linked to the customer’s account and informing associated creditors and debtors about the new account details.
If you ask your new bank to help you switch they will contact your old bank to get a 13-month list of:
- Direct debits (regular payments)
- Direct credits (regular deposits such as your salary)
Your new bank will give you the 13-month list so you can decide which regular direct debits or credits you would like to move across to your new account. You then authorise them to give all of the relevant payees your new account details and they will take care of the rest.
And remember to close your old account, as you may get charged account keeping fees if it remains open with a zero or low balance.
The government insists the tick-and-flick process should cost zilch, with the bank picking up the tab. However, the “remember process” only applies to deposit and transaction accounts and does not extend to loan products, as these are legal contracts with their own set of complexities.
This is definitely a step in the right direction but be clear on who pays for what. Without a home loan being transferred at no cost, the idea of just switching your deposit or transaction account loses some of its appeal for home loan borrowers. It also begs the question, how good a deal will you get if you don’t switch the lot? Make sure you ask so you don’t get the flick if you tick.
Article updated 01/07/2012