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Consumers can earn £100 switching to a Halifax bank account
Derin Clark

Derin Clark

Online Reporter
Published: 04/08/2020

Halifax is offering consumers £100 simply by switching to its Reward Current Account or Ultimate Reward Current Account from their current bank account. This offer starts today and lasts until 14 September 2020.

The Halifax Reward Current Account charges a monthly fee of £3, but the fee is waived if the account is credited with at least £1,500 per month. This account enables consumers to earn Rewards Extras, from which they have a choice of two digital movie rentals, three digital magazines, one cinema ticket or £5 paid directly into the account. Rewards are only given if the eligibility criteria are met.

Halifax’s Ultimate Reward Current Account charges a £17 monthly fee. This account also enables consumers to earn Rewards Extras, as well as offering mobile phone insurance, domestic emergency cover, vehicle breakdown cover, card loss assistance and worldwide travel insurance.

Both accounts offer an overdraft facility for which they charge 39.9% EAR. The Ultimate Reward Current Account charges 0% EAR on overdrafts of up to £50. To find out more about how bank account overdrafts work, read our guide How does a current account overdraft work?.

In order to earn £100, consumers need to use the Current Account Switch Service to transfer all the active credits and debits from their old bank account to the new Halifax account and close their old bank account. The switch from the old account to the new Halifax account must have started by 14 September 2020. Consumers will not be eligible for the £100 if, since April 2018, they have received a switching offer for switching to a Reward Current Account or Ultimate Reward Current Account.

Commenting on the Halifax switching offer Rachel Springall finance expert at Moneyfacts.co.uk, said: “It’s great to see a switching offer return to the market for consumers who are looking to switch their current account. Overall, the Halifax Reward or Ultimate Reward Current Account offers a decent package where consumers can earn a little extra each month. As is common before entering any arrangement, consumers would be wise to compare the overall package of an account and not be swayed by upfront perks alone.”

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How to choose the right student account ready for the 2020/21 year

Despite the current uncertain climate, next month universities are set to reopen and welcome a new influx of freshers. For many students due to start their degree next month, getting a student bank account will be one of the most important financial decisions they make in preparation for their university life.

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Overdraft interest rates set to rise – tips for paying off your overdrafts

At the start of the Coronavirus pandemic, the majority of banks put on hold their planned overdraft interest rate rises to help consumers struggling financially due to the pandemic, but now many banks are set to go ahead and increase their rates.

The banks that are due to increase their fees during July and August are Barclays, first direct, HSBC, NatWest, Royal Bank of Scotland (RBS) and Starling, with Santander also due to raise fees in the future.

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Banking service standards see little progress in Q1 2020

The most recent results for the banking service standards from the Financial Conduct Authority (FCA) show that banks are making little progress to improve their service standards.

The latest results cover 1 January 2020 to 31 March 2020 and show that while there has been progress in some areas of customer service, banks are still failing to improve in others. Most notably, more banks can open a normal account within one day, with the average time taken to issue a new card being just under five days. However, some banks are still making customers wait for weeks to replace cards that have been lost.

On a positive note, the time taken to gain access to online banking has continued to improve across the sector. At the other end of the scale, six banks remain unable to provide an instant decision on overdraft requests taking just under four days on average.

These service performance results are issued quarterly by the FCA and shows how quickly banks and building societies carry out a series of common banking services. The FCA introduced these standards with the aim of helping customers choose a bank account in the full knowledge of the service experience they can expect the receive.

There’s more information on the independent service quality survey in our helpful guide: How satisfied are consumers with their banks?

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Average one year bond rates at a three-year low

Savers looking to lock their money into a short-term bond will be disappointed to learn that the average rate on a one year fixed rate bond has fallen below 1% for the first time in three years.

Data from the soon to be published Moneyfacts UK Savings Trends Treasury Report shows that the average rate on a one year fixed bond stands at 0.99%, its lowest since May 2017 when it was 0.98%. As well as this, the average one year fixed ISA rate has also fallen and now stands at 0.91%, the lowest it has been since June 2017 when it was also 0.91%.

This will have a significant impact on savers who locked their money into a short-term bond during 2018 or 2019, as they will find the savings rates currently on offer to be much lower. Rachel Springall, finance expert at Moneyfacts.co.uk, explained: “Those savers who are about to come to the end of their fixed bond may wish to prepare themselves for a shock, as they will find the top rates have dropped substantially over the years. Indeed, a year ago the top one year fixed bond paid 2.20% as an expected profit rate from Bank of London and The Middle East (BLME), but today the top deal pays 1.50% from Gatehouse Bank as an expected profit rate, 0.70% less. On an investment of £20,000, that is a total interest loss of £140. In May 2015 the top five year fixed bond paid 3.09% from United Bank UK (now UBL UK), so a saver coming off this deal and is now looking to lock their money away for five years with the top deal from Gatehouse Bank, that pays 1.85% as an expected profit rate, will note a difference of 1.24%, a total loss of £1,240 on a £20,000 investment over five years.”

Falling average rates have also impacted easy access accounts, with the average easy access rate dropping to 0.40% at the start of May, from 0.51% in April. This was the biggest fall since December 2012, three months after the Funding for Lending Scheme was launched. In April, a new Funding for Lending Scheme was introduced, which together with the historic low base rate cut that took place in March, could see easy access savings rates fall further over the next few months.

Springall added: “If savers are looking for some flexibility with their cash then they may turn to an easy access account, however as these pay a variable rate the return could drop at any point. In fact, the market is already seeing a domino effect of rate cuts, with some of the top deals worsening in recent weeks. Providers are perhaps cutting rates to deter deposits due to demand or find they are much higher up the rate tables than they can cope with. Indeed, according to the Bank of England £11 billion flowed into sight deposits (such as easy access accounts) during March.”

Savings market analysis - average rates 

  March 2020 April 2020 May 2020
Average one year fixed rate bond 1.15% 1.09% 0.99%
Average longer-term fixed rate bond* 1.37% 1.28% 1.18%
Average one year fixed rate ISA 1.14% 1.04% 0.91%
Average longer-term fixed rate ISA* 1.29% 1.15% 1.07%
Average easy access rate 0.56% 0.51% 0.40%
Average easy access ISA rate 0.83% 0.79% 0.63%
Average notice rate 1.00% 0.97% 0.89%
Average notice ISA rate 1.13% 1.05% 0.89%

*Longer-term bonds or ISAs are those with terms over 550 days. Average interest rates based on a £5,000 deposit as at the start of the month. Source: Moneyfacts Treasury Reports 

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