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Banks rein in current account cash sweeteners

Paloma Kubiak
Written By:
Paloma Kubiak

Free cash rewards offered to customers switching current accounts are being scaled back, research suggests.

In the past six months, current account cash incentives have dwindled, making it far less rewarding for customers to switch to a better deal.

As of yesterday, Halifax Reward Current Account customers will receive a £2 per month bonus, down from £3 a month. This is the second change it’s made to the reward payment after cutting the rate from £5 to £3 in February 2017. Just a year ago, it offered switchers £125 to switch current accounts on top of the £3 a month reward, meaning savers could net £161 in total.

But today, switchers to Halifax will receive £99 in their first year – £62 less.

NatWest/RBS also removed its £100 switcher incentive in July while customer service led First Direct scrapped its cash switch deal in favour of tech and travel vouchers.

TSB also removed its reward payment of up to £10 a month in June.

But according to data site Moneyfacts, which compiled the research, the latest cut from Halifax may make other providers rethink their incentives in an attempt to attract those savers looking to switch.

Barclays has recently brought back its double rewards for switchers on the Blue Rewards, which was previously withdrawn in June.

The table below lists all the changes:

‘Act fast on good switching deals’

Rachel Springall, finance expert at Moneyfacts, said there are other ways for consumers to get some free cash out of their bank account, away from current account switching sweeteners.

“For instance, The Co-operative Bank pays £4 net per month when customers meet certain eligibility criteria, plus up to £1.50 per month when using their debit card, which totals £66 in the first year.

“It’s clear to see that the free cash cutdown isn’t an anomaly, with it happening across various brands over the last six-month period, and it’s possible that providers will continue to rein in their rewards as we enter a period of economic uncertainty.

“While one provider has gone the other way recently, there’s no telling whether this is the start of a more positive trend in the market or just a one-off. With this in mind, any customers who have yet to take advantage of switching incentives may want to act quickly, before more cuts take place.”