Banks ramp up the freebies in current account wars

Banks are battling it out for your current account custom, with generous cash incentives and other perks now on offer to encourage you to switch.

The biggest cash switching offer available is from NatWest, which will pay new customers £150 to switch to its Select Account, as long as they use the Current Account Switch Service (CASS), pay in £1,500 and register and log in to online or mobile banking. This is a big hike from the £100 NatWest offered at the end of 2021, but this deal only runs until 7 April.

Another top deal is from Santander, which is offering £140 to switch to its 123 Current Account, up from £130 a few months ago. To grab this incentive you must switch using CASS, pay in £1,000, set up two direct debits and log in to online or mobile banking within 60 days of your switch.

first direct, consistently a top performer for customer service, will pay you £130 to switch to its 1st Account using CASS, as long as you credit your account with £1,000 within three months.

You could get up to £125 for switching to Nationwide’s Flex Account with CASS if you are already a member, or £100 if you are a new customer.

Aside from cash, there are other incentives on offer too: Virgin Money will give you a £100 Virgin Experience Days Gift Card if you switch to its M Plus Account. It also increased the credit interest the account pays from 2.02% to 5.02% AER on balances up to £1,000 for the first year, but you must also open a linked M Plus Saver account, and you can get cashback on your debit card spending.

While the Virgin Money account is one of the top high interest accounts available right now, you could also choose a spend and save account. Santander’s 123 Current Account gives you 1-3% cashback on selected household bills and Santander home or life insurance premiums, but there is a monthly fee of £4. You also get 0.30% AER credit interest on balances up to £20,000. There’s a free overdraft for four months but after that it jumps to 39.94% EAR.

And, finally, for someone who uses their overdraft often, Starling Bank’s Current Account charges 15% EAR for an overdraft (that’s £2.89 a week if you borrow £500) and pays 0.05% AER on credit balances up to £85,000.

Rachel Springall, finance expert at Moneyfactscompare.co.uk, said the market is heating up as banks try to attract new customers. “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 Current Account Switch Service (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. As much as £150 in free cash is on offer from NatWest, which launched just last week,” she said.

“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.”