MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Leanne Macardle

Leanne Macardle

Editor
Published: 14/01/2019

The start of a new year can herald a new beginning for people's finances, with the excess of the festive period inspiring many to take a closer look at their outgoings – and some consumers inevitably consider moving their current account in the process. Given that cash perks and switching incentives are returning to the banking sector, now could be a great time to do it!

Current accounts can be easily overlooked, with some consumers feeling it would be too much of a hassle to switch – but they could miss out on free cash or a nice monthly perk because of this. Indeed, current account providers have been upping their game recently, with the table below highlighting some of the best deals on offer today, compared to the perks available this time last year.

Upfront switching incentives on current accounts


Providers


Account


Incentive Jan 2018


Incentive Jan 2019

first direct

1st Account


£100 upfront


£100 upfront


Halifax

Reward Current Account


£75 upfront

£50 upfront, plus £85 in six months


HSBC


Advance Bank Account

£150 upfront, plus £50 in 12 months


£150 upfront

M&S Bank


Current Account

£125 gift card upfront, plus £5 per month top up

£100 gift card upfront, plus £80 gift card after 12 months*


NatWest


Reward Account


£125 upfront


£150 upfront

*Existing M&S credit card customers can get up to £220 when they switch and stay. Source: Moneyfacts.co.uk


"A new year can also bring a new attitude when it comes to finances, and starting afresh with a new current account could be a consideration for many consumers," said Rachel Springall, finance expert at Moneyfacts.co.uk. "Coincidently, January tends to be a popular time for providers to launch tempting free cash incentives to entice consumers to switch."

However, Rachel points out that, "while any free cash perk is tempting, customers looking to move their current account must be sure that a short-term financial incentive isn't the sole reason for leaving their existing provider, as the new account may be more expensive for dipping into an overdraft or it may not pay any credit interest, for example." This is why it's so important to compare the finer details of any account thoroughly before making the switch, taking factors such as overdraft fees and credit interest into account.

Then there are things like customer service and access to the account, which could prove to be key motivations for switching. Many consumers seem to be taking the plunge, too, with 5.1 million switches having been made since the Current Account Switch Service (CASS) launched in 2013.

The importance of customer service and perks such as in-credit interest are highlighted when looking at the most recent CASS figures, covering the period 1 July 2018 to 30 September 2018. These show that Nationwide Building Society – whose FlexDirect account pays an in-credit interest rate of 5% on balances of up to £2,500 – recorded a net gain of over 34,000 full account switches, whereas TSB made a net loss of almost 17,000, arguably due to the IT meltdown that plagued the bank earlier in the year.

At the same time, challenger banks like Starling Bank are gaining new customers, with straightforward fuss-free alternatives to traditional banking – in this instance, digital, mobile-only banking – proving to be a tempting offer for many consumers.

"Not only do providers offer financial incentives to attract customers, but accounts such as Santander's 123 Current Account pay monthly interest and cashback on spending for a £5 per month fee," said Rachel. "Whether customers are able to benefit from these types of incentives will depend on their day-to-day spending, so it would be wise to consider how an account is used and whether this type of perk best suits their individual needs.

"2019 is set to be another interesting year for consumers looking to change their spending habits, as it is hoped they will have a clearer view of their financial circumstances to help them make a decision to switch."

What next?

Thinking of switching your current account? Check out the top deals currently available to see how you could benefit.

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

credit cards

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy