What should I know about switching bank accounts?
For private individual clients
1) What is the purpose of the bank account switching procedure?
The objective of the procedure regulated by Government Decree No. 263/2016. (VIII.31.) on payment account switching is to make the process of switching bank accounts within or between banks easier for private individual clients. Additionally, the regulation further simplifies the transfer of various payment orders to another payment service provider (e.g. periodic transfer orders, collection orders, recurring transfers received), while retaining or terminating the earlier bank account.
The essence and benefit of the simplified procedure is to enable the preferred account management organisation to take care of the switching-related tasks linked to payment accounts of an identical currency opened or managed in Hungary, on behalf of and in the name of the client, based on the client’s respective authorisation and according to the scope he/she designates.
Although you are entitled, as part of the bank account switching process, to provide for the simultaneous termination of your previous bank account, we recommend not to do so for 1-2 months from the date of switching. During this period, the credit and debit items launched earlier (e.g. purchases made using your card) can arrive seamlessly.
2) What do I have to do to initiate bank account switching?
- Open a payment account with the financial institution of your choice, if you haven’t done so already.
- As an account holder, you can initiate bank account switching by means of a written, so-called account switching authorisation, filed with your new account manager. In the event that there will be more than one account holder linked to the earlier bank account impacted by account switching, account switching may exclusively be jointly initiated by the account holders. Please be advised that bank accounts managed by our bank may only have one owner.
- In the form you have to disclose, in addition to your personal data
- the data of the bank accounts impacted,
- the bank account switching date,
- additionally, you have to specify whether you intend to retain the earlier bank account,
- which of the regular transfer orders and collection orders you intend to transfer to the new bank account.
- You can also decide whether you yourself intend to notify the persons that have made recurring transfers to your account during the past 13 months, or whether you mandate the manager of your new bank account to inform the transferring parties through their respective account managers. In this latter case, you have to disclose the contact information of such partners. If you yourself intend to provide for their notification, the manager of the bank account to be terminated will send you a schedule of the recurring transfers you received in the past. For identification purposes, please bring with you your ID documents (for example, your ID card and address card). You will receive a copy of the account switching authorisation, which you are advised to retain.
- Based on the data provided, the collection and regular transfer orders you select from amongst those completed from your earlier bank account will be linked by your new account manager to your new bank account.
- Based on your respective request, your earlier account manager will provide you with a certificate relating to the recurring transfers linked to your bank account.
- Additionally, you have the opportunity of initiating, with the involvement of your new account manager, that your bank account contract with your earlier account manager is terminated and that the persons initiating your recurring received transfer orders are notified, through their respective account managers, by your new account manager.
3) What steps does retail bank account switching involve?
4) What are the deadlines for the different steps in retail bank account switching?
The complete bank account switching process usually takes around 15 to 30 days.
- In the first step, the new account manager notifies the earlier account manager of the bank account switching within 2 working days from taking receipt of the account switching authorisation.
- Within 5 working days, the earlier account manager makes available to the new account manager, subject to your instructions recorded in the account switching authorisation, the data linked to the orders kept on record, and also makes available, subject to your request, a certificate relating to these orders.
- Additionally, the earlier account manager takes steps for terminating the performance, with effect from the date designated, of the transfers received, the collection orders and the regular transfer orders, and for transferring to the new bank account the balance remaining on the earlier account, if so requested by the account holder.
- Based on the data received, the new account manager activates in its own system, within an additional 5 working days, the payment orders taken over, with effect from the commencement dates you specify, and notifies the collectors impacted and the earlier initiators of recurring transfers, through their respective account managing banks, of the new payment account.
- If you so requested in the account switching from, the earlier account manager will terminate your old bank account, with effect, at the earliest, from the date you requested (but not earlier than on the sixth working day from the time the necessary data are made available to the new account manager by the earlier account manager), subject to the notice period, if any, or will send immediate notification of any respective obstacles.
5) What expenses does retail bank account switching involve?
The data provision and the issuing of the certificate in relation to switching between banks must be performed free of charge. With regard to account switching, the institutions may exclusively charge a rational fee that is proportionate to the costs actually incurred. A number of types of expenses may be linked to the termination of a bank account. These typically include the monthly closing fee of the bank account, which is usually charged after each month commenced, as well as the fee of transferring a positive balance to the new account. Certain institutions may also charge an additional fee for terminating the account. Always inquire about the applicable charges. It is worthwhile to leave this amount on the account, so that this poses no obstacle to switching.
6) In what manner can the retail bank account contract and other related contracts and payment transactions be terminated?
If you intend to switch between service providers altogether, you must complete the above process with respect to all existing retail bank accounts and you must terminate all contracts and services linked to the bank account. Please be aware of the fact that the bank account switching process described above does not extend to services that are in addition to your payment accounts and related services, such as a potential credit card, mortgage loan, etc. contract.
7) Under what circumstances can a bank account contract not be terminated by means of account switching?
A retail account cannot be terminated, if:
- there is a tied-up deposit linked to the account; or
- there is a debt linked to the account (your balance is negative); or
- a potentially immediate collection order or enforcement procedure has been launched involving the account; and
- in the event that there is any other active service, e.g. a bank card or contract linked to the bank account.
Some institutions may stipulate that loans disbursed by them and lease fees can only be repaid from a bank account managed by the given bank. An account cannot be terminated in such event, and it is important that a sufficient balance is available on your account at the time of repayment.
8) Please note!
- Your cannot terminate your contract by simply not using your bank account.
- Bank account switching only results in the termination of the existing bank account if this is expressly requested by the client and there are no obstacles to the termination.
- For switching between banks altogether, you have to terminate all other related contracts.
- For making the opening of a bank account with a payment service provider operating in a different EEA country easier, based on a respective request, Hungarian retail payment service providers will make available, in Hungarian or any other language specified in the previously concluded agreement, a statement that contains the data of all valid regular transfer orders and collection authorisations, as well as of the recurring transfers credited to and received at the customer’s bank account during the previous 13 months. In the event of terminating the account contract, settlement is conducted with the client at the latest on the working day following such termination and, based on the client’s requests, the service provider transfers the amount of funds available on the terminated account to the account opened with the new account manager.
- We hereby inform you that in the event of a legal dispute, you have the opportunity of initiating a procedure with the Financial Arbitration Board (PBT) using the following contact information: address: 1013 Budapest, Krisztina krt. 39., mailing address: 1525 Budapest BKKP Pf. 172; telephone: 06-1-4899-700; email address: email@example.com. We also inform you that the Bank undertakes to be bound by the procedure of the PBT or, in the event that no agreement is reached, by the resolution adopted as part of the procedure, if the value of the transaction to which the legal dispute relates is not in excess of 3 million HUF and the amount claimed by the Client is not in excess of 1 million HUF. Please also be advised that the application form for initiating a procedure before the Financial Arbitration Board is available at the below address of the National Bank of Hungary: http://www.mnb.hu/bekeltetes/fogyasztoi-jogvita-nem-elszamolasi-ugyekben
9) Where can I find further information?
• +36 1 325 3200, firstname.lastname@example.org
The information is not comprehensive.