The study by personal finance comparison site Finder.com found that consumers were asked to meet up to six different requirements for a bank switch deal in 2024, compared to a maximum of just two requirements in 2020.
The average number of requirements across all offers has nearly doubled between 2020 and 2024.
Finder.com analysed 86 bank switching deals on the market in the four-year period to determine how many unique requirements consumers would have to meet before getting their cash reward.
The deal with the most criteria in 2020 had a total of two steps. However, by 2024, this has risen substantially to six. The researchers also found that the average number of requirements across all bank switching deals in a year had increased in the same period, almost doubling from 1.6 to 2.9.
Requirements for deals live this year included transferring direct debits, making five or more debit card payments, joining rewards schemes, opening an additional savings account and depositing into that savings account.
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This is a major change from four years ago, when almost all switching deals simply asked you to log into the banking app and deposit a certain amount.
Meanwhile, a survey by Finder.com found that more than three-quarters (76%) of Brits have never switched a current account to take advantage of a switching offer. More than one in 10 (12%) gave having too many different requirements to meet as a reason for not switching, while 14% said the cash rewards were not worth the effort required.
One reason for banks becoming more stringent could be to clamp down on so-called ‘serial switchers’ who open a current account solely to take advantage of the money offered, then swiftly leave for a better deal.
Figures from the Current Account Switching Service (CASS) showed that between July and September 2023, when NatWest had a £200 deal running, more than 94,000 people switched to the bank, and it topped the net gains leaderboard for that quarter.
However, during the next three-month period (between October and December 2023), the bank lost more than 50,000 customers to account switches, 54% of the previous gains. This gave it net losses of more than 43,000, going from top to bottom of the leaderboard in just one quarter.
During the same time frame, Nationwide launched a £200 switching offer and gained more than 190,000 new customers.
‘New, stricter era for switching deals’
Louise Bastock, money expert at Finder.com, said: “Read the T&Cs for a bank switch offer these days and you might find your head spinning with all the strings attached. We’re in a new, stricter era for switching deals, with banks seemingly looking to put off ‘serial switchers’ with additional rules, but they are still a great way to earn extra cash.
“At the moment, you could earn a lump sum of £175 from the latest First Direct switch deal, when you complete a full switch to a First Direct 1st Account and meet all of their eligibility criteria within 45 days of opening your account. A huge draw of this account is access to the first direct Regular Saver, which offers an extremely competitive 7% AER fixed for the first 12 months and only on balances up to £3,600.”
She continued: “Even with the extra rules, switching offers are a comparatively quick way to get a cash boost. To earn £100 in interest, you’d have to leave £1,000 in a savings account earning 4% AER for two-and-a-half years.
“With so many hoops to jump through these days, the key to bagging the most cash is preparation. I’d urge people to thoroughly check the eligibility criteria and work out in advance whether you can meet them. Organise your finances so any direct debits or minimum monthly transactions are being processed on time, and pop any deadlines in your calendar so you can keep track of your progress.”
