Best Current Account switching offers & incentives
From 16th September 2013 consumers have been able to switch current account within 7 workings days.
Previously switching current accounts was seen as a nightmare, taking up to 30 days to complete, plus there was little incentive to do so. It is perhaps unsurprising that consumers have typically only switched their bank once every 16 years. Yet banks are the biggest source of complaints to the Financial Ombudsman.
Switching bank accounts got a whole lot easier thanks to the Current Account Switch Service being brought in by regulators in a bid to boost competitiveness within the banking sector. Plus there are now genuine incentives to change your bank or building society.
Switching current accounts is now quick and easy
Under the Current Account Switch Service consumers will be able to choose the date on which they want to transfer their current account and the whole process will not take more than 7 working days.
Direct debits and standing orders will also be automatically transferred across to your new account as will any payments sent to the old account (for a period of 13 months). If any payments are missed, they will guarantee to reimburse you in full.
Best current account switching deals
Banks and building societies are offering some fantastic cash incentives to tempt customers away from rival banks. Below is a roundup of the best current account switching offers out there. Typically you have to close your old account once you've made the switch in order to receive the incentives.
|Bank/building society||Incentive to switch||Min monthly paid in|
|First Direct||£100 cash (boosted to £125 if you apply via moneysavingexpert)||£1,000 a month for 3 months|
|Natwest / RBS||£175 cash if you switch and stay (+2% cashback on bills)||£1,500 - complete switch by 12th July (Natwest) or 2nd August (RBS) and use their debit card until June 2020|
|M&S||£100 M&S gift card + £80 M&S gift card after a year||£1,250 a month (but you have to switch within 3 months of opening account and have 4 active direct debits) extra £80 if you continue with all of the above and elect to bank online and receive online statements|
|Nationwide||5% interest on £2,500 (i.e £125) - fixed for a year (1% after)||£1,000 per month (if referred by a Nationwide account holder, you can both qualify for £100 cash for the referral)|
Check who owns each bank before making a switch
The Financial Services Compensation Scheme (FSCS) protects your savings for losses up to £85,000 (£170,000 for joint accounts) should your bank or building society go bust, as long as it is authorised by the Financial Conduct Authority (FCA). However, the scheme protects your savings up to £85,000 per bank or building society providing the bank or building society has their own banking authorisation. Some banks and building societies share their banking licence with other brands because they are part of a bigger group (for example HSBC and First Direct). In these instances, you will only be covered for £85,000 across both banking brands for accounts in your sole name (£170,000 for joint accounts). Therefore it is important to ensure that you understand how switching bank accounts will impact your protection under the FSCS when viewed in the context of your existing accounts. This handy tool allows you to select the banks and building societies that you currently hold money with (or plan to hold money with) to see your level of protection under the FSCS if any of them were to go bust.
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