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Best current accounts for free cash to switch

Big banks may be refusing to pass on base rate rises to savers, but they are back to offering juicy incentives to current account switchers.

Four of the best deals come from First Direct, Nationwide Building Society, NatWest, and Santander, with up to £150 free cash on offer, 3 per cent cashback and 5 per cent interest on balances, if people use the Current Account Switching Service.  

It comes as inflation hits a 30 year high, while energy prices and telecom bills continue to soar.

For many, it could prompt them to switch banks to take advantage of the cash incentives to help negate the cost of living crisis.

Current account providers are increasing their enticing current account switching perks

Changing current accounts is simple and with providers offering upfront cash incentives to customers.  

NatWest is offering £150 to both new and existing customers, while Santander offer a £140 cash back incentive and ongoing cashback perks on household bills. 

First Direct has £150 on offer, and Nationwide up to £125.  

Virgin Money have also tweaked their switching incentive on its M Plus Account; as switchers now receive a £100 Virgin Experience Days Gift Card, and a higher credit interest rate of 5.02 per cent.

It comes as they attempt to battle the big winners in the switching battle. Top of the tree in the latest statistics, which cover June to September 2021, is Nationwide Building Society which gained 33,828 switchers.

This was followed by Starling Bank at 15,371. Meanwhile, Santander gained 4,372, Virgin Money 3,377 and NatWest lost a net 5,341. 

Meanwhile, HSBC – which First Direct is part of – saw a net loss of 19,760. It doesn’t split it out for First Direct numbers.  

We take a look at the best incentives as the cost of living crisis bites. 

Santander is offering new and existing customers £140 upfront for switching to one of their current accounts

Santander is offering new and existing customers £140 upfront for switching to one of their current accounts

1. Best account for cashback: Santander 123

New and existing customers can benefit from switching to a Santander 123 current account, with up to 3 per cent cashback on bills and £140 in free cash.

Account holders with Santander will get 3 per cent back on water, 2 per cent on energy and 1 per cent on Santander mortgages, broadband, council tax, and phone bills when paid via direct debit.

With the average annual cost of a water bill currently stands at £408 and as energy prices continuing to soar, account holders could see up to £120 additional cashback from these two bills alone.

Santander also works with retailer offers: a free service that lets the account holder earn up to 15 per cent cashback from a number of major retailers.

However, new account holders should be aware that there is up to a £4 per month fee to use the current account, and cashback on the 123 tiers is capped at £15 per month. 

The good news is, the Santander Everyday current account is a fee-free option that still offers a £140 cash incentive to switch. 

You won’t get access to the 123 cashback offer, but you can still benefit from up to 15 percent cashback through the retail offers.

NatWest have increased their switching incentive to £150 to customers who switch to one of their Select or Reward current account's but only if they act before April 7, 2022

NatWest have increased their switching incentive to £150 to customers who switch to one of their Select or Reward current account’s but only if they act before April 7, 2022

2. Best account for upfront cash: NatWest Rewards

NatWest previously offered customers a £100 upfront cash incentive for switching to one of their many rewards accounts, before increasing the incentive in January 2022.

They are now currently offering new customers £150 upfront for switching to a Select, or Reward account, providing they make the switch before 7 April 2022.

Existing customers can also benefit from the upfront cash incentive by switching to either a Reward Silver, Reward Platinum, or Reward Black account.  

The Reward account gives customers up to £4 per month in rewards for setting up two Direct Debits and an offers an additional £1 for logging onto online banking.

However, the reward account comes with a £2 monthly fee costing £36 per year for reward account customers.

But, someone taking advantage of NatWest’s switching offer could still expect to earn £186 in the first year if they switched to its Reward account.

The Select account comes with no monthly charge, but does not offer the reward incentive.   

3. Best account for customer service: First Direct

Virgin M Plus account

Current account holders looking at the overall package of their account may find the new offer from Virgin Money attractive. 

While it doesn’t offer cold hard cash, switchers to the Virgin M Plus account will get a £100 Experience Days gift card, as well as an in-credit interest boost of up to 5.02 per cent for the first year, with no monthly minimum to pay into the account. 

The rate is paid on balances up to £1,000 over the course of the first year, meaning account holders could see at least £50 earned in interest overall. 

Account holders also get cashback on everyday purchases with select retailers, giving account holders an extra boost during the UK’s cost of living crisis. 

There’s no monthly fee or cost to use your debit card abroad, and account holders have access to an arranged overdraft with interests rates starting at 19.9 per cent. 

Switchers should be aware that they need to open a M Plus Saver Account at the same time as current account in order to receive Virgin’s cashback perks. 

The 5.02 per cent interest deal ends after a year, when it drops back to 2.02 per cent, meaning it may be switching again after the 12 months. 

This week also saw the relaunch of First Direct offering a £150 bribe to new customers switching to a 1st Account with the bank. 

It’s only open to those who haven’t had an account with the bank or opened an HSBC current account on or after 1 January 2019. 

Customers may hold a HSBC current account and still qualify for the offer, as long as the current account was opened before 1 January 2019. 

The bank often tops customer service rankings.  

The joining incentive is available to new to bank customers who switch their full banking to first direct using the CASS and pay in at least £1,000 within three months of opening the account.

It also offers a regular saver with 1 per cent interest, for those who tuck away between £25 and £300.   

4. Best account for loyalty: Nationwide Building Society 

Those switching to a FlexPlus, FlexDirect or FlexAccount could get up to £125.

If you’re not yet a member, you could get £100. 

If you’re already a member, you could get £125. 

To qualify, you need to complete a full switch online to a FlexPlus, FlexDirect or FlexAccount from another building society or a bank, and make sure you switch over two direct debits.

The FlexDirect comes with a 2 per cent interest rate on balances up to £2,000 for the first year. 

Not all deals give an expiry date… 

While some of the banks above have given a deadline, some warn they are for a ‘limited time only,’ so it is worth checking the deadline for the providers you are considering.

Rachel Springall, a finance expert at Moneyfacts, said people should act quickly to make the most out of the lucrative offers.

She said: ‘Consumers looking to switch their current account will be pleased to see an array of free cash and perks launched which may entice them. 

‘Those who switch using the CASS could get either an upfront free cash incentive or perk as providers heat up the market with new offers to fight for new business.’

Some providers have also been known to withdraw their offers at any moment, so those looking to take advantage should do their research but act quickly. 

Rachel added: ‘As we have seen with HSBC withdrawing its £150 offer last week, there is no guarantee such lucrative perks will remain on offer forever, but this time of year tends to be a popular one for providers to launch offers. 

‘As the cost of living is expected to rise, consumers may be tempted to grab a free cash perk, but it is imperative they weigh up the overall package of any account before they commit and be sure it suits their needs.’

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