At any one time, you’ll usually be able to find at least a couple of current account switching perks on offer, often giving you the chance to bag some free cash with just a few clicks.
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 only a couple of 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.
The biggest switching incentives
First Direct: £175
First Direct has reintroduced its popular switching bonus, offering new customers £175 when they move to its current account – but there are a lot of restrictions to bear in mind.
To get the bonus, you must make the switch using the Current Account Switching Service (CASS), and within 30 days of the new account opening you’ll need to transfer at least two direct debits, a balance of at least £1,000 and use your debit card at least five times.
The payment will only be made to those who have never held a First Direct product, or held a current account with HSBC since January 1 2018.
There is no specific date when the offer will be withdrawn, but it’s understood to only be around for a “limited time”.
Virgin Money: 12.49pc interest
A step away from the traditional switching cash payment, Virgin Money is instead offering bonus AER interest to new customers who switch to its Virgin Money M, M Plus and Club M accounts.
For the first 12 months of holding the account, an extra 10.47pc interest will be paid on balances up to £1,000. To get the most interest bang for your buck, you’ll need to go for the M Plus Account, where the bonus interest is paid in addition to its underlying rate (2.02pc), boosting it to 12.49pc AER. If you were to keep £1,000 in the account for the full 12 month period you could earn around £130.
You must open an eligible Virgin Money account by May 31, and switch via CASS by June 26 – including at least two direct debits. The bonus interest is paid between July 1 2024 and June 30 2025.
Always switch via the CASS
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.”
Check qualifying terms
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.
Kate Brain, banking expert at ratings firm Defaqto, said: “Be mindful that most providers do stipulate that if you have held an account with them within the last year or two, you won’t qualify for the cashback.”
First Direct, for example, will only pay out a bonus once, so no returning customers can benefit.
The key is to read the full terms before you agree to switch.
How to become a serial switcher
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.
Ms Brain added: “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.
How exactly do you switch bank accounts?
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.
Top tips for switching bank accounts
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.
Download your bank statements
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.
Assess your direct debits
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.
Hold off setting up new payments
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.
Check your overdraft eligibility
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.
Consider your credit score
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.
Seen an offer you like? Don’t delay
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.
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