Banks Start Withdrawing Switching Offers | moneyfacts.co.uk

Derin Clark

Derin Clark

Online Reporter
Published: 10/11/2020

Consumers looking to boost their finances by getting cashback from switching bank accounts need to act quickly as NatWest and Royal Bank of Scotland’s offers are due to end next week.

Both NatWest and Royal Bank of Scotland (RBS) enable new and existing customers to earn £125 by switching to a specified current account, but both deals end on 19 November 2020. “Consumers looking to take advantage of switching cash perks do not have long to do so, as current account providers continue to adjust their offerings,” explained Rachel Springall, finance expert at Moneyfacts.co.uk. “Most recently, Bank of Scotland and Lloyds Bank pulled their £100 switching offer and next week NatWest will pull its £125 cash perk.”

At the moment HSBC and Metro Bank are also currently offering switching deals. With HSBC, customers can earn £125 by switching to a HSBC Premier or Advance current account. Meanwhile, Metro Bank is offering customers up to £250 when they refer a friend to the bank through its Metro Bank Refer a Friend switching offer. With this deal, which is due to end on the 11 December 2020, the bank pays £50 per friend referral up to a maximum of five friends.

Banks reduce current account perks

Not only are banks withdrawing switching offers, but there has also been a reduction in the perks being offered on current accounts. For example, Santander has reduced the bills that cashback is offered on with its Santander 123 Current Account from 3% to just 1%, while it has increased the fee on the 123 Lite Account to £2 per month. Commenting on the Santander account change, Springall said: “Those customers looking for benefits on a current account will have also seen perks cut on some of the most lucrative deals recently too. Santander’s 123 Current Account has had its cashback on communication bills cut from 3% to 1% and the fee on its alternative 123 Lite account has risen to £2 per month. During the first full second quarter of 2020, Santander experienced a net loss of over 12,000 switches, and with these latest changes, it will be interesting to see whether customers move elsewhere.”

Consumers who have seen a fall in perks being offered on their current accounts and who are thinking of switching can compare their account to others current available on the market using our bank account comparison chart.

High interest accounts rates fall

Although the highest interest rate of 2.02% being offered on current accounts is still available in the charts, banking customers will have seen a number of rates fall this year. As Springall explained: “Savers turning to high interest current accounts will be disappointed by the state of play, with many lucrative offers seeing rate cuts in 2020. Most recently, Bank of Scotland and Lloyds Bank made cuts of up to 0.50%, which means customers who have £4,000 in their account will earn 1.50% instead of 2.00% AER. The highest interest rate on offer on a standard current account today comes from Virgin Money, at 2.02% AER on balances up to £1,000 and as an alternative, Nationwide’s FlexDirect currently pays 2% AER on balance up to £1,500 for the first year. As is commonplace, there will be a balance limit to how much interest someone can earn, plus there may be other eligibility criteria to meet too.”

With rates being reduced, customers looking to secure the highest interest rates on current accounts should act quickly to get the best rates available. Currently Virgin Money offers the top rate of 2.02%, on balances up to £1,000, on its Virgin Money Current Account – Age 18 and over. Savers can find all the top interest rates available on current accounts on our high interest current account chart.

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.

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