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Current account holders flocked to HSBC, NatWest and TSB for £200 cash bonus

Current account holders flocked to HSBC, NatWest and TSB for £200 cash bonus
Paloma Kubiak
Written By:
Paloma Kubiak

HSBC, NatWest and TSB were the big winners of the current account switching war in Q3 2023 as tens of thousands of savers ditched their existing banks for a £200 bonus with the lenders.

In the three months to 30 September 2023, NatWest recorded a net gain of 59,158 current account customers, after onboarding 94,796 users but waving goodbye to 35,638.

The huge influx ties in with the launch of its £200 current account cash sweetener, and according to Pay.UK figures, NatWest won the switching war in each quarter since the start of 2023.

In second place came HSBC with a net gain of 25,037 current accounts. It saw 68,360 newbies open accounts but 43,323 left the banking giant. It ran a £200 switching offer between April and 3 July.

TSB makes up the trio of switch winners, clocking up a net gain of 15,754 current accounts in Q3 2023 – also aligning with the launch of its £200 cash switching bonus. However, 28,769 customers came on board, but 13,015 parted ways with the bank.

Current account switching

While the customer switch data is three months in arrears due to “commercial sensitivity”, Pay.UK, the owner and operator of the Current Account Switch Service releases total but anonymised figures on the number of recent switches.

Q4 2023 was “the busiest ever switching quarter”, it said. Between October and December 2023, 433,701 switches took place which is 15% higher than Q4 2022.

Meanwhile, November recorded the highest monthly switches at 162,637. This is the biggest number since the switch service launched over a decade ago, with 10.2 million switches taking place since 2013.

Pay.UK said the elevated switching figures “may indicate that both consumers and businesses are reevaluating their existing accounts amid ongoing economic uncertainty”.

A statement added: “Account holders may be exploring banks and building societies that provide more tailored services, attractive switching incentives, or promotional offers that better suit their needs.”

As has been the case for consistent quarters, online or mobile banking (44%) was the top reason why people preferred their new account. Following this, interest earned (34%) was the second most important reason, with customer service (33%) and location of branches (22%) coming in at third and fourth respectively.

John Dentry, product owner at Pay.UK, said: “Once again, the run-up to the Christmas period proves itself to be an important time for switching current accounts. It’s encouraging to see more consumers and businesses utilising the service to take advantage of a healthy banking market and ultimately find a current account that best serves their needs.

“As interest rates appear to be stabilising, it will be interesting to see how the market develops. Despite higher interest rates, cash incentives and other financial benefits, online and mobile banking still continues to be the most significant reason that consumers prefer their new current account.”

Cash incentives drive business, but are they drying up?

Andrew Hagger, personal finance expert from Moneycomms.co.uk, added: “The latest CASS figures once again confirms that offering a cash incentive drives new business.

“HSBC and NatWest offered £200 for much of 2023 and is reflected in their strong performance in 2023 with NatWest adding a net 204,504 customers in the first nine months of last year with HSBC adding 75,652 during the same period.”

However, Alastair Douglas, CEO of TotallyMoney, said the number of switching offers has “tailed off in 2024” with only First Direct (£175) and TSB (£125) currently putting up cash rewards for bank switchers.

“Whether this is just a lull or maybe the beginning of the end for cash incentives, time will tell, but without the incentives it’s highly likely that switching numbers will fade.”