Santander returns with £175 switching bonus – should you move banks?

A Santander switching deal has been brought back offering £175 if you move accounts.

If you’ve been eyeing up a new bank account, then now could be a good time to take advantage of the best offers for switching banks plus other account perks.

The bank now competes with First Direct’s top £175 switching deal which returned just last week and Virgin Money’s 10% return on current account balances. 

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

Before this, Santander brought back its £185 switch bonus which was on the table for those who switched before 4 April. Plus, the bank offered up to £200 back in January 2023. 

Santander’s packaged bank accounts are popular due to its cashback perk on major household bills and its 7% Edge Saver which features in our best easy-access savings guide. But, the provider is to cut its top 5.2% easy-access saver rate in days, so it's worth checking that the perks are competitive compared to the wider market. 

Find out how to get the £175 bonus, if you’re eligible and how the deal compares to the rest of the market. 

Santander switching deal: how to get £175

New and existing customers can get a £175 cash bonus if you switch one of Santander’s following packaged current accounts: Santander Edge current account (£3 monthly fee), Santander Edge Up current account (£5 monthly fee) or its Private current account (£5 monthly fee).

To qualify for the bonus, you must switch using the Current Account Switch Service (CASS) and complete the following within 60 days: 

• Pay in £1,500 into the account. This can be done as a one-off payment or in separate instalments.
• Set up two direct debits in the eligible account

Providing that you qualify, your bonus will be paid within 90 days of starting the switch process. But you must also keep the account open to receive the free cash. 

You can make the switch in branch or through Santander’s website. 

If you're an existing customer and already hold an eligible Santander account, you can bag the free cash by transferring £1,500 from an account held with a different provider to the existing Santander account via the bank’s switch service. Plus, you will need to set up two direct debits. 

If you want to take advantage of this offer, you might need to act fast as switching deals tend to have a short lifespan, and Santander has clarified that this is a limited-time offer that can be withdrawn at any time. 

Is the Santander switching deal any good? 

Santander’s £175 bonus matches the top switching incentive on the market right now offered by First Direct. But Santander requires you to switch to one of its packaged bank accounts, where you will have to pay a fee. 

Here’s how much you would end up paying in fees over a year with the eligible accounts, and how much that would eat into your £175 bonus.

But the account's perks might make up for the amount lost in fees. 

If you go for the Santander Edge account, you can earn up to £20 in cashback a month on household bills and travel or supermarket spending. If you take full advantage of that each month, after a year you would end up with £240 just in cashback – which already beats its £175 switching bonus. 

On top of that, you get access to its Santander Edge saver returning a variable rate of 7% AER on balances up to £4,000. Providing that you kept a balance of £4,000 from day one up until a year, you would earn £280 in interest. Even if you saved £2,000, you would end up with £140. 

With the switch bonus including the £3 monthly fee (£139), plus the £240 cashback and £280 in interest, you bag a total of £659. Obviously, that’s quite a few hoops to jump through, but it outdoes any switch deal on the market right now. 

Santander’s Edge Up or Private current account has more caveats, but the rewards also increase. For example you can earn up to £30 in cashback a month and earn 3.5% interest on account balances of up to £25,000. But they require you to deposit at least £1,500 each month and for the Private account, you have to set up two more direct debits. 

Other perks on all three accounts include fee-free spending abroad and an arranged overdraft depending on your credit history. 

If you want to switch accounts but are on the hunt for a free current account, First Direct is also offering £175 if you switch to its 1st Account. Its perks include fee-free spending and a £250 interest-free overdraft, subject to your credit history. 

Virgin Money is offering a 10% return on balances for a year to those who switch to its current account, which means you end up with £100 free cash, and the eligible accounts include free-to-hold and packaged accounts.