Banks dangle carrots to get you to switch current accounts
|
Version 0 of 1. Cashback, “golden hello” payments of up to £150, and generous rates of interest are among the latest carrots being dangled in front of bank customers in an attempt to persuade them to switch current accounts. This week, TSB launched a cashback deal on its most popular current account that allows people to earn up to £60 a year from their contactless card payments. Meanwhile, as of Tuesday this week you can pocket £150 if you move to First Direct’s main current account. Nationwide and Halifax are among the other high street names trying to persuade people to take their cash. It all indicates that competition in the current account market is hotting up; according to MoneySuperMarket, providers are “increasingly looking to offer bigger and better incentives”. But despite these tempting offers, and the introduction of the free-to-use “current account switch service”, several surveys have indicated that more than half of all customers have been with the same bank for more than 10 years. “Many of us are loyal to our current account provider, even if they offer us nothing in return for our fidelity,” says Charlotte Nelson at financial data website Moneyfacts. “However, now that the seven-day switching service is in operation, there’s no reason not to switch – particularly as there are many enticing offers out there.” So what would persuade you to switch? We round up the latest offers. Many of us are loyal to our account provider, even if they offer nothing in return. But there are many enticing offers • TSB is giving its Classic Plus account holders 5% cashback on the first £100 of contactless purchases made each month using their debit card. TSB relaunched two years ago after being spun off by its parent company Lloyds, and was taken over by Spanish banking group Sabadell this year. It launched Classic Plus, which has no monthly fee, in March 2014 and since then more than 380,000 accounts have been opened. This account already rated pretty highly because it offers customers 5% interest on balances of up to £2,000 – a perk worth up to £97.80 a year (no interest is paid on your money above £2,000, and you have to pay in a minimum of £500 a month). That interest rate beats the vast majority of savings accounts. Now TSB has said people can use their contactless debit card and be rewarded at the same time. The cashback is automatically earned by all Classic Plus customers who hold a contactless debit card and are registered for internet banking, and it will be paid monthly. It means you can pocket up to £60 a year – but the offer is due to expire on 31 December 2016. Classic Plus comes with another perk, too: you can open a linked TSB monthly savings account where you can save from £25 to £250 each month for a year, and earn a fixed 5% interest. The maximum you could earn after a year is £81. • First Direct will give people £125 if they switch to its current account, which is called 1st Account. Currently, if you apply through MoneySuperMarket you will receive £150. You need to use the official current account switch service and pay in at least £1,000 within three months of opening the account. • Nationwide has a deal where, if you recommend a friend or family member, you get £200 to share. So if a current account holder recommends the society to a friend or relative, it will give them £100 each when the friend switches their main account over to it. The other person needs to open a FlexAccount, FlexDirect or a FlexPlus account (the society’s Cash Card and FlexOne accounts are excluded from the offer) and complete a full transfer using the current account switch service, which involves the closure of their old account. You can recommend as many friends as you like, and they will each receive £100, but Nationwide will only pay you a maximum of £1,000 in any 12-month period. • Halifax will pay you £100 if you switch to its fee-free Reward current account. Plus, you get a £5 “reward” payment each month that you pay £750 or more into your account, pay out two different direct debits and stay in credit. This payment is net of income tax – the gross amount is £6.25. Again, with this offer you must use the current account switch service. Bank of Scotland bank account customers switching to the Halifax are excluded. Halifax has been one of the big winners from the scheme to make switching easier. In July the bank launched a service called “snap to switch” allowing people to move their current account by taking a photo of their debit card with their mobile phone. Using a smartphone or tablet, customers can upload a picture of the debit card for the account they want to switch. The service then automatically populates the various fields of the online application form. • Yorkshire Bank and Clydesdale Bank are each offering £150 if you switch your main bank account over to them. Again, you must use the official switching scheme, and pay in at least £1,000 a month and maintain a minimum of two active direct debits. |