Many banks offer cash incentives to switch your current account to them, because they know that you are then more likely to buy additional products, such as credit cards and mortgages.For shrewd savers, there's an opportunity to profit from moving accounts, says Ruth Lythe in the Daily Mail. One dedicated switcher she interviewed has changed bank accounts six times in the last two years, making £800 in the process.
The hassle of moving all your financial arrangements puts many people off ever changing banks. But new rules introduced in 2013 made the process much easier by forcing banks automatically to transfer direct debits from your old account to your new one. This has led to a sharp rise in switches, says Tim Wallace in The Daily Telegraph, with 2.8 million people using the automated switching service since 2013.
It's likely that many of these were motivated by the cash on offer, with big winners including Halifax (which pays £100 to switch) and Nationwide (which gives £100 to those referred by an existing customer, plus £100 to the referrer).
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
Some banks have recently ditched their incentives, including TSB and HSBC, but Co-operative Bank still offers a generous £150, HSBC's subsidiary First Direct pays £100, and the HSBC-run M&S Bank gives you a £100 gift card. However, if you're considering switching regularly to pick up these perks, bear in mind that current account applications require credit searches, and having several recent credit searches on your file can be a warning sign for lenders. So avoid doing this when you may want to apply for a mortgage or other credit in the next few months.
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
