Banks are on the lookout for new current account customers, and they are prepared to pay you up to £175 if you move your main account to them – but make sure you pick the account that best suits your needs.
The Current Account Switch Service (CASS) makes it quick and painless to switch banks. All you do is open a new current account and request a switch via CASS. The service will then close your old account and move all your money, direct debits and standing orders to your new account within seven days. Plus, for three years any money that is paid into your old bank account or tries to leave your old account will automatically be changed to your new account.
Weighing your options
So, what are your options? HSBC is offering the biggest cash switching bonus, with £170 if you are a new customer and move to its HSBC Advance account. However, there isn’t anything else that makes the account worth having: it pays no interest or cashback, and the interest rate on an overdraft is hefty at 39.9%.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
First Direct’s 1st Account is better. Switch and pay in £1,000 and you’ll get £150 if you haven’t held an HSBC or First Direct account since January 2019. First Direct customers also get access to a regular-saver account that pays 3.5% interest on contributions of up to £300 a month. Max that out and you’ll earn around £68.25. You could get a £250 free overdraft as well.
Nationwide has a great offer for existing customers: if you switch a non-Nationwide bank account to a FlexDirect account, you can get a £125 bonus. New Nationwide customers get £100. The account pays 2% interest on balances up to £1,500 for the first year (provided you haven’t held a FlexDirect account before).
You can also can get a £125 bonus for switching to a Club Lloyds account. There’s a £3 monthly fee, waived if you pay in £1,500 per month. As well as the bonus, you get a choice of one of these extras every year: six cinema tickets, 12 digital film rentals, a Gourmet Society membership or an annual magazine subscription. You also get 0.6% interest on balances of up to £4,000, 1.5% on the next £1,000 and nothing on anything above £5,000. So, the maximum interest you could earn in a year would be £39. You need to pay in enough to avoid the fee to make this account a good choice.
New app-based bank Chase – owned by JPMorgan – could be an option if you’re more interested in long-term gains. Its current account pays 1% cashback on most purchases for the first year and comes with a linked savings account paying a table-topping 1.5% interest on up to £250,000.
You can also authorise the account automatically to round up your spending to the nearest £1; the difference is then put in a linked account paying 5% interest. All those perks will easily earn you more than any other bank is offering as a switching bonus.
For more on this topic, see:
Get paid to switch your current account
-
August NS&I Premium Bond winners unveiled - have you scooped £1m?Two lucky NS&I Premium Bond winners are now millionaires in the August draw. Find out here if you are one of them
-
Savings rates more than double in a year as challenger banks top the best buy tables
The best savings rates have doubled - and in some cases tripled - in a year, with challenger banks offering the highest rates. While they are still no match for inflation, we look at what you could be earning.
-
Midlife MOT: what is it and who can get one?
The government has launched an online midlife MOT to help older workers with financial planning, health guidance and career skills. But how does it work, who can get one and would you pass it?
-
Coventry Building Society launches new best easy access savings account
Coventry Building Society's deal tops our easy access savings account list, but could your cash be put to better use?
-
NS&I boosts fixed-term savings rates
The NS&I, the government-backed savings institution has mirrored recent rate rises seen elsewhere in the market.
-
Should you let AI give you financial advice?
Can AI fill the financial advice gap? Kalpana Fitzpatrick looks at the pros and cons of using AI to guide your finances.
-
Small pension pots to be consolidated, says DWP
Workplace pension schemes worth less than £1,000 that become “deferred” when a saver changes jobs will be consolidated under a new system
-
Watchdog summons banks to explain paltry savings rates
Savings rates trail mortgage rates - and the financial watchdog has summoned banks to a meeting amid concerns of profiteering.
