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The current account sector had largely fallen off the radar in recent months, with many providers cutting their switching incentives, perks and interest rates amid lacklustre competition. However, a slight boost in activity this week suggests that the tide could be starting to turn, with two providers enhancing their cash offers to customers…
Earlier this week, NatWest launched its latest switching incentive, with it now offering £175 to both new and existing customers who switch their main bank account. This includes £125 after the first few months and an additional £50 after the first year, with the bank saying it's the highest switching incentive it's ever offered.
There could be several extra perks for customers to enjoy, too, with those switching to the NatWest Reward current account able to earn 2% cashback on household bills as well as additional rewards and incentives, while those opting for the Reward Silver, Platinum or Premier Reward accounts can benefit from extra perks such as travel insurance and 40% off cinema tickets (monthly fees and minimum income requirements may apply).
To qualify for the switching incentive, customers will need to use the Current Account Switch Service and close their existing account, thereby transferring their main current account to NatWest. They'll also need to pay in at least £1,500 and will need to log in to online or mobile banking before 12 July. It's also worth pointing out that this is a time-limited offer – the deal is available now and runs until 7 June, so if you're thinking about switching, you may want to do so in the next couple of months to benefit from the cash bonus.
TSB has made a couple of changes to its popular Classic Plus Current Account, and while one of them won't be quite so welcome, the other could still give customers the chance to earn something extra.
First up, the bank is launching a 'refer a friend' scheme, whereby current account customers can earn £75 for every friend they refer who subsequently switches to TSB, and the friend will also receive £75. Existing customers can refer up to five friends, giving them the chance to earn up to £375, with the promotion running until 30 June.
The next change isn't quite so promising, with TSB announcing that it's reducing the rate of interest on the account from 5% AER to 3% on balances of up to £1,500 from 2 July. This will come as quite a blow to customers who may be using the account as a place to stash some of their savings, though the bank says it still offers one of the best interest deals on the market.
"It's disappointing news that TSB will be dropping its lucrative credit interest rate by 2% in July, especially as it increased the rate last year after its IT systems caused chaos for customers," said Rachel Springall, finance expert at Moneyfacts.co.uk. "While the recommend a friend offer is a nice sweetener, some friends may be reluctant to switch to TSB; however, the current account is still a decent offer and it should be considered against the rest of the competition."
If neither of the above accounts work for you but you still want to benefit from a decent switching incentive or in-credit interest rate, Rachel has a few recommendations:
"Thankfully, customers can still earn 5% elsewhere, such as with Nationwide's FlexDirect that pays 5% AER for the first 12 months on balances up to £2,500, and customers will just need to pay in £1,000 a month. Nationwide still offers its recommend a friend incentive, too, where customers can share £200 with friends if they switch their main current account; currently, they could earn up to £500 per year by recommending five friends.
"Elsewhere, those who switch to M&S Bank will get up to £180 in a gift card, including £100 upfront and a further £80 after 12 months, and first direct will pay £100 upfront for those who switch to their 1st Account. Halifax also has an offer for switches, as they will pay £50 when they switch and a further £85 after six months, provided customers pay in at least £1,500 per month, go paper-free and use their debit card.
"However, as with any current account, customers would be wise to consider all the benefits of the account, including the overdraft rate, and not be swayed by just an upfront free perk."
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