Six current accounts that offer the best switching deals

Saturday, 28 January 2012 04:10

By Kate Saines

The dawn of 2012 has seen competition in the current account market hot up as the banks and building societies vie for our custom.

As such there are some tempting incentives on offer in return for switching your bank account to another provider including cash bonuses, inflation-beating interest rates and interest-free overdrafts.

But if you are reluctant to move your banking – even for a perk or two – you are not alone. The average person in the UK, according to Halifax, has had their main bank account for over 20 years.

And 30 per cent of us said there was nothing which would make us consider moving providers.

It will come as no surprise then to hear one in ten adults still use the account they opened when they were children as their main current account today.

And the reasons for choosing a bank account don’t always include practical incentives as the main factor. According to Halifax, 17 per cent of us chose our bank because it was where our parents’ held their account, and a quarter chose their bank because it was close to their home.

But, by staying loyal to our childhood bank account provider, many of us could be using a product that is totally unsuitable for our needs.

What’s more we could also be missing out on some fantastic financial rewards by sitting tight with our current account.

Anthony Warrington, director of Halifax current accounts, said moving to the right account could actually make people better off.

“If someone’s with the bank they chose at 11 years old, or simply because it was the closest branch to where they lived at the time, the likelihood is there is an account that is more suitable for them now,” he explained.

“It’s an important decision and it doesn’t have to be hard work.”

With so many new current account switching incentives on the table, it would certainly make good financial sense to take a look at the offers to see if they can benefit you.

If you are put off by the hassle of switching, remember that the banks want your custom and, as a result, they all provide dedicated switching teams to manage the change as part of the service.

The important thing is for you to ensure you choose an account with the correct benefits for your personal circumstances.

Kevin Mountford, head of banking at, said: “Consumers should consider whether, despite all the initial tempting offers, these accounts offer value over time.”

He added: “Ultimately, people need different things from their current account, some are always in credit and will find that cash incentives are the best way to maximise returns, but others will need to consider various overdraft charging structures.”

It’s also important to be aware of the difference between a standard bank account and packaged current account. You can benefit from incentives such as cashback, interest-free overdrafts and other perks from fee-free accounts.

However, many of these benefits are also available – along with other incentives – from packaged accounts which will charge you a monthly fee.

In many cases this fee could cost you more than the value of the benefits, especially if you don’t use them, so beware of this and stick to fee-free products if you are unsure.
Here’s a list of some of the current accounts available at the moment with the most tempting switching incentives.

Read more: The best savings bonds on the market

Follow on Twitter: @news_myfinances

Sign up to the newsletter to receive the latest financial news direct to your inbox.

Santander Preferred Current Account

If you switch your main current account to this one, you’ll receive £100 cash. There is also a five per cent in-credit interest rate and customers may be able to qualify for a 12-month free arranged overdraft.

Santander is also offering incentives of £300 and £200 to mortgage customers who switch to this account, but this is dependent on a range of terms and conditions.

The advantages of this account are obvious. However, the in-credit rate applies to balances of no more than £2,500 for 12 months and you must be able to credit the account with at least £1,000 to reap all the rewards.

Be aware, also, if you hold this account for the long term – longer than 12 months – you’ll start paying £1 a day if you use your overdraft, although this is capped at 10 days per month. The offer is available until February 29th.

Halifax Reward Current Account

Halifax is currently offering £100 to new customers switching to one of its current accounts. And anyone visiting a Halifax branch to open the account will receive the cash the same day.

Opt for the Halifax Reward Current Account and you’ll benefit from a monthly payment of £5 if you pay in £1,000 or more each month. This applies whether your account is in credit or not.

Halifax’s Ultimate Reward Current Account offers the same £5 monthly payment and comes with a raft of other benefits including travel insurance, breakdown cover and discount card but will cost you £15 a month.

This is probably not the account for you if you are a frequent overdraft user. The rate charged for using the authorised overdraft is £1 per day up to £2,500 and £2 per day for more than £2,500. This current account offer is available until February 19th.

First Direct 1st Account

Yet another bank offering £100 as a switching incentive is First Direct. As an additional bonus it comes with a satisfaction guarantee whereby, if you are not happy and want to switch to another bank after six months First Direct will give you £100 to help you move.

You must have paid £1,500 per month, for six months, into the account to benefit from the £100 satisfaction guarantee cash.  A £250 interest-free overdraft comes as standard with this account, but if you go overdrawn by more than this you’ll pay 15.9 per cent interest.

There’s no interest for being in credit on this account, so it could be useful for people who often dip – by less than £250 – into their overdraft. You have to be a new First Direct customer to benefit from these incentives. 

HSBC Bank Account

As part of its ‘January Sale’, HSBC is offering an in-credit interest rate of six per cent to customers, new and existing, who switch to its current account.

This fixed rate of interest is available for customers with balances of up to £2,500 and lasts for 12 months. After this time no interest will be paid. You’ll need to open the account, which has an overdraft interest rate of 19.9 per cent, before January 31st to take advantage of the deal.

Santander Everyday Current Account

While there are no cash incentives to move to this one, there is also no minimum funding requirement. So, if you have a modest or irregular salary this could be the account for you.

It also offers people switching to the account a zero per cent overdraft for four months. After this period you’ll be charged 50p a day for every day you are overdrawn up to a maximum of £10 per month.

Nationwide FlexAccount

Meanwhile, you’ll need only £750 a month paid into your account to qualify for the benefits of the Nationwide FlexAccount.

It also comes with a zero per cent overdraft interest rate for the first three months plus free multi-trip European travel insurance for customers who qualify for the debit card.

Account holders also benefit from access to exclusive deals including discounts on personal loans and mortgage deals. After the initial three month interest-free period, the overdraft rate goes up to 18.9 per cent.

Read more: The best savings bonds on the market

Follow on Twitter: @news_myfinances

Sign up to the newsletter to receive the latest financial news direct to your inbox.

Comments Bubble Comments

blog comments powered by Disqus

Twitter: My Finances

Join the conversation at #news_myfinances

Newsletter sign up


In addition to the weekly newsletter, which areas of finance would you like to hear from us about:

Tick this box if you would like us to send you promotions from carefully selected third parties.

By signing-up you agree to the terms of use and privacy policy.

sign-up button

Get the latest information on: