Act now to get cash for switching current accounts
Moneyfacts warns that consumers need to act quickly as banks start withdrawing bank account switching offers.
Most recently, Bank of Scotland and Lloyds Bank pulled their £100 switching offer and next week NatWest will remove its £125 cash perk.
Both NatWest and Royal Bank of Scotland (RBS) currently enable new and existing customers to earn £125 by switching to a specified current account, but both deals end on 19 November 2020.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “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.”
At the moment HSBC and Metro Bank are both currently offering switching deals.
With HSBC, customers can earn £125 by switching to a HSBC Premier or Advance current account.
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.
Moneyfacts says that 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 a month.
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.”
“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 0.5%, which means customers who have £4,000 in their account will earn 1.5% instead of 2% 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. As an alternative, Nationwide’s FlexDirect currently pays 2% AER on balance up to £1,500 for the first year.
With rates being reduced, customers looking to secure the highest interest rates on current accounts should act quickly to get the best rates available.