Banks and building societies run this type of promotion from time to time in a bid to entice new customers in.
Right now, there are several deals up for grabs, just for moving your current account from your existing provider to a new one.
Andrew Hagger, personal finance expert from Moneycomms, said: “The switching incentives are more attractive than ever. The ‘£100-deals’ will no longer cut it, as most providers are offering almost double that amount these days.”
Equally, while a one-off bonus may sound pretty appealing, if you’re prepared to put in the legwork, there’s potentially some serious money to be made by repeatedly switching accounts – as long as you carefully navigate the banks’ various terms and conditions.
If you can get past the caveats, switching to First Direct can be very lucrative.
A one-off £175 is up for grabs for those who switch to its 1st Account via the CASS. You must switch at least two direct debits or standing orders, and within the first 45 days of the account opening, you must deposit at least £1,000, make at least five debit card transactions and log in to digital banking.
The kicker is you can’t get the payment if you’ve held a First Direct account before, or if you’ve opened an account with HSBC since January 1 2018.
Nationwide is also offering £175 for those who switch to one of its three main current accounts – FlexPlus, a packaged account costing £13 a month that comes with family worldwide travel insurance, mobile phone insurance and breakdown cover; FlexDirect, which pays 5pc on balances up to £1,500 and 1pc cashback up to £5 per month for the first 12 months; FlexAccount, an everyday bank account.
Using the CASS, you’ll need to transfer at least two active direct debits, deposit at least £1,000 and make a qualifying debit card payment within the first 31 days.
TSB will pay £100 to those who switch to its Spend and Save current account, and then £10 cashback each month for six months to encourage you to stay.
There are some requirements to fulfil, though. Firstly, your switch (via CASS) must be completed by March 14, and to get the £100 you must log in to the TSB mobile banking app and make at least five debit card payments by this date. If successful, the initial part of the bonus will be paid between March 28 and April 11.
To earn the monthly cashback, you need to make at least 20 card payments in each calendar months.
Any switchers who still hold the account in September – and make at least 20 card payments in August – will also be able to choose an extra reward, including a hotel stay for two, two cinema tickets a month for three months, or a six-month Now Entertainment membership.
In return for a full switch to one of its eligible accounts, Santander is paying customers £150.
You’ll need to open one of the following current accounts: Santander Edge (£3 a month), Santander Edge Up (£5 a month), Santander Everyday or Santander Private (£5 a month). Some of these come with monthly fees, but offer cashback on certain spending.
To get the bonus payment, you’ll need to pay in at least £1,500 into the account and have at least two direct debits from the account within the first 60 days of making the switch request.
If you fulfil the criteria, the bonus will be paid within 90 days of making the switch request.
You won’t receive the bonus if you switch from an account held with Cahoot, Santander or Cater Allen, or if you’ve received a switching bonus from Santander since September 2021.
The Co-operative Bank’s “Switch and Stay” offer pays up to £150 – but it’s paid gradually over the course of four months.
You can get an initial switching bonus of £75 if you switch to a new or existing Co-op Bank account.
Within the first 30 days you must deposit at least £1,000, have two or more direct debits, make 10 or more card or digital wallet transactions, register for online banking services or mobile app and set up the debit card in a digital wallet (such as Apple or Google Pay).
You can’t have benefited from, or being waiting to receive, a Co-op switching offer on or since November 1 2022.
To get £25 a month for up to three months afterwards, you’ll need to continue to deposit at least £1,000 or more, make at least 10 card or digital wallet transactions and continue to have at least two active direct debits.
To qualify for the free cash handouts, you have to go down the “official” transfer route, and this means using the Current Account Switch Service (CASS).
This is a free scheme which aims to take the hassle out of switching, with the process completed in seven working days. While most banks are signed up, not all of them are, so you’ll need to check availability when you’re looking to move.
All payments going out, such as direct debits, and those coming in, such as your salary, will be moved for you. Any payments accidentally made or requested from the old account after you’ve moved will be automatically redirected.
There is also a guarantee that acts as a safety net if anything goes wrong, meaning you will receive a refund of interest and charges on both your old and new accounts.
Mr Hagger said: “The CASS has given many consumers the confidence to ditch their existing bank.”
As we’ve noted earlier, there can sometimes be several hoops to jump through in order to qualify for a switching bonus; if this is a big part of why you want to move accounts then it’s worth ensuring you meet all the criteria laid down by your chosen provider.
Mr Hagger added: “This might mean ensuring you credit the account with a certain amount each month, or checking you have the right number of direct debits or standing orders set up on the account.”
If you’re a regular current account switcher, you’ll likely need to avoid going back to the same provider – or group of providers – for a few years before you’re able to get another switching bonus.
The key is to read the full terms before you agree to switch.
If you’re savvy with your money, and have the time to dedicate to regularly scouring switching offers, there’s decent cash to be earned by switching more than once.
Mr Hagger said: “If you’re comfortable opening and closing bank accounts, and happy with the idea of getting new debit cards, account numbers, sort codes, PINs, new online banking set-ups and passwords, then there’s money to be made.”
This trick involves cashing in on all of the available switching deals – so it makes sense to time it for whenever there are several available.
Better still, further deals may appear in the weeks to come. By the time you get to the end of the process of switching to these providers, you could find there are fresh offers available from the other banks, meaning you could potentially earn even more.
Before you get excited, don’t bank on having that cash to spend right away.
Kate Brain, banking expert at ratings firm Defaqto, said: “While the CASS means you can switch accounts within seven days, be aware that some of the conditions mean it does take longer for the money to be paid out.”
One tip she recommends for “serial switchers” is to think about opening a separate account from your main current account. So, keeping some direct debits and spending in one account that you hold more consistently, while transferring others around. This can be a help if you are concerned about transferring all your outgoings.
Once you’ve found a new account you’d like to move to, compare it against other offerings, just to be sure you’re making the right choice.
Then, check that you’re eligible for the account, and the switching offer.
If you’re happy that you qualify, all you need to do is open the new account and let your new provider know you’re switching over. It should only take a matter of minutes to fill out the form.
Your new bank will then do all the legwork for you. This includes transferring all your direct debits and standing orders being transferred to your new account.
It’s then down to you to select the date you want your account switched, and down to your former bank to take care of closing your old account.
While the CASS aims to make the switching process as seamless as possible, it can still be a little disruptive – but there are things you can do to make sure you don’t lose track of your payments.
Before your old account gets shut down, download your bank statements from the last few months. That way, you will have them if you need them – they might be required if you need to remortgage or apply for another kind of borrowing, for example.
Seize the opportunity to make a note of all your direct debits, standing orders and subscriptions, so you know you’ve moved everything over. Also use this as a chance to look for better deals, and weed out any payments for services you no longer use.
In the few days while the switching process is taking place, don’t set up any regular payments from your old account, as they may not be moved over.
If you have an overdraft with your existing provider, you will need to speak to your new bank first to see if this facility can be agreed on your new account. Borrowing rules can vary between providers, so don’t assume you’ll be able to get the same amount of overdraft.
While switching accounts shouldn’t affect your credit score, tread carefully if you are thinking of taking out a mortgage or loan in the near future. Mortgage providers and other lenders don’t like to see too many accounts opened in a short space of time, as this could suggest money problems. With this in mind, avoid switching providers too frequently ahead of applying for any type of borrowing.
If you decide one of the accounts offering a cash incentive is right for you, you need to act fast, as these latest switching deals may not hang around for long.
Rachel Springall, from Moneyfactscompare.co.uk, said: “Switching bonuses come and go. There is no guarantee such lucrative perks will remain on offer forever.”
That being said, it’s also important to research any deals carefully before making any decision.
Ms Springall added: “Consumers may be tempted to grab a free cash perk, but it is imperative you weigh up the overall package on offer before committing to any new account.”
It’s not all about the money; your current account is likely to be the financial service you use most often, so you also need to be sure the account suits you, and the way you manage your finances. If, for instance, you’re switching to an online-only bank, when you value visiting a branch, then the switch may not be the best decision.
