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
-
Should you sell in May this year?The market adage looks unlikely to apply in 2024, and global equities are proving resilient
-
Should you invest in UK equities?The FTSE 100 hit a record high this week, but UK equities remain unloved and undervalued compared to their global and US peers. Should you snap them up at a discount?
-
What pension providers don't tell you about your retirement moneyCheck the small print from your pension provider or risk losing thousands.
-
Britain’s stifling tax burdenChancellor Jeremy Hunt's Autumn Statement will see the tax burden rise in each of the next 5 years.
-
Brace for a year of tax risesThe government is strapped for cash, so prepare for tax rises. But it’s unlikely to be able to squeeze much more out of us.
-
Lock in high yields on savings, before they disappearAs interest rates peak, time to lock in high yields on your savings, while they are still available.
-
How to cut the cost of home insuranceHome insurance policies are becoming increasingly expensive, but there are several ways you can keep costs down.
-
Are lifestyle funds still fit for purpose?Lifestyle funds have failed to do what they were supposed to do – shield savers from risk in the run-up to retirement.
-
Act now to bag NatWest-owned Ulster Bank's 5.2% easy access savings accountUlster Bank is offering savers the chance to earn 5.2% on their cash savings, but you need to act fast as easy access rates are falling. We have all the details
-
Moneybox raises market-leading cash ISA to 5%Savings and investing app MoneyBox has boosted the rate on its cash ISA again, hiking it from 4.75% to 5% making it one of top rates. We have all the details.
