Get paid to switch your current account

NatWest and Santander are both offering big cash bribes to encourage people to switch to their current accounts. You could get £150 if you move your day-to-day banking to NatWest’s free Select account or its £2 a month Reward account. Santander is offering £140 if you use the current-account switching service (CASS) to move to one of its current accounts.

The money is a great incentive, but you need to consider more than just the switching bonus when choosing a current account. There’s no point getting £150 if you then run up an overdraft that costs you far more. Equally, check you can meet the criteria to get the bonus before you move.

NatWest’s best current account deals

NatWest’s Select account offers no additional rewards, but it is a free bank account. However, the more tempting option is the bank’s Reward account, which pays you £4 a month as long as you have two direct debits going out of your account, plus an additional £1 a month if you log on to internet banking. You can also earn 1% cashback when you spend with certain retail partners, including Caffe Nero. However, the account has a £2 monthly fee and you’ll pay interest at an effective annual rate (EAR) of 39.49% if you use the overdraft facility.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues 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

Sign up

The surprising thing with NatWest’s switching bonus is that it is available to existing as well as to new customers. If you already bank with NatWest then you can earn the £150 by moving to either a Reward Silver, Reward Platinum or Reward Black account. These are packaged bank accounts costing from £10 to £31 a month depending on the products you want included. Options range from travel insurance to a concierge service.

To qualify for NatWest’s switching bonus you must use the CASS, close your existing account and transfer your main current account to NatWest by 7 April. You must also deposit at least £1,250 into the account and log into online or mobile banking by 12 May. You can’t have received another switching bonus from NatWest since October 2017. If you meet the criteria, you’ll get your £150 by 9 June.

Get cashback on your bills

Santander is offering the switching bonus on any of its current accounts as long as you use the current-account switching service. Its 123 and 123Lite accounts are already popular, so adding a £140 incentive should encourage many people to move.

The accounts pay 3% cashback on water bills, 2% cashback on energy bills and 1% on council tax, phone, broadband and paid-for TV packages. With energy bills set to soar this year earning a bit back via your current account could prove very appealing. In order to get the cashback, you have to pay in at least £500 a month, have two active direct debits and log into online or mobile banking at least once every three months.

The difference between the 123 and 123Lite accounts is you also get 0.3% interest paid on balances up to £20,000 with the former, but it costs £4 a month. The 123Lite account pays no interest but costs less at £2 a month. If you are likely to use your overdraft, be aware that interest is charged at 39.94% on both accounts.

Santander will pay you a £140 switching bonus if you use the current-account switching service to move to one of their accounts, deposit at least £1,000 and log into online or mobile banking. Do all that and the money will be in your account within 30 days. If you’ve had a switching bonus from Santander before you won’t be eligible for this deal.

Two options for your overdraft

If you have a large overdraft then you could save more than you’d gain from these switching bonuses by moving to a current account with an interest-free borrowing facility. Nationwide’s FlexDirect account comes with a 0% overdraft of up to £2,750 for the first 12 months. That could save you around £140 over a year if you are £1,000 in the red with a bank charging 40%, such as the NatWest and Santander accounts.

Alternatively, if you only need a small overdraft then First Direct’s 1st account could be a good option. It has a £250 interest-free overdraft and is offering a £150 switching bonus to new customers.