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Current account war wages on: are these offers enough to entice you?

Paloma Kubiak
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Paloma Kubiak

The number of people who opened a current account in 2015 soared by 104% compared to the previous year as banks ramped up their switching incentives.

And according to analysis by comparison site MoneySuperMarket, it seems the offers are still coming thick and fast in 2016 as providers battle it out to entice new customers.

Among them are £150 to switch to First Direct’s 1st Account, via MoneySupermarket only, and £150 to switch to Clydesdale Bank’s Current Account Direct.

A number of ongoing cashback deals such as the M&S £220 store credit for people who switch their current account and meet the requirements, have recently launched.

The Co-op Bank’s Standard Current Account offers the potential of £166 cash in the first year: £100 switching via MoneySuperMarket and £66 on top if customers set up at least four monthly direct debits and log into their online or mobile app once a month.

Max savings with in-credit interest

Current account holders can earn extra by keeping a certain amount of money in their account. Nationwide offers five per cent AER on balances up to £2,500, as well as a 0% EAR on overdrafts for the first year, as long as £1,000 is paid into the FlexDirect account monthly.

For those with higher balances, the Santander 123 account pays 3% AER on balances between £3,000 and £20,000, provided that you pay in £500 each month. It also pays up to 3% cashback on household bills, such as utility, council tax, mobile and home phone bills. But there’s a monthly fee of £5, so it’s important to work out whether you’ll be making a profit after this.

Great offers on the market

Kevin Mountford, banking expert at MoneySuperMarket, said: “There has been a lot of movement and change in the current account space since the start of the year and we’re now seeing some great offers on the market.

“Consumers should switch and take the incentives being offered if they aren’t satisfied with their current deal, but also thoroughly examine the whole package before making any decisions.”

Mountford says it’s important to consider how the account will be used on a day-to-day basis and review any fees and charges to avoid paying over the odds, especially if the account goes overdrawn.