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M&S relaunches £300 current account switch offer: is it enough to entice you?

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Written by: Paloma Kubiak
19/07/2016
M&S Bank has brought back its current account switch incentive giving new customers the chance to earn up to £316 in year one.

The high street retailer is offering new current account customers the chance to earn a total of £316.63 in the first year via a combination of gift cards and cash.

They will receive: £100 M&S gift card for the initial switch, £10 a month M&S gift card for the first 12 months (£120 in total) and up to £96.63 gross interest (6 per cent AER/gross) on savings of between £25 and £250.

How do you get it?

To be eligible for the £316, you need to switch your existing current account via the Current Account Switch Service (CASS).

You can opt for the M&S Current Account (fee-free) or the M&S Premium Current Account (£10 per month) but with both accounts, you need to set up at least two active direct debits.

In order to get the additional £10 per month gift card, which will automatically be loaded onto your original gift card monthly, you need to deposit £1,000 per month into the account. If you don’t pay in £1,000 per month, you won’t receive the £10 gift card for that month only.

As an M&S current account customer, you’ll be able to open a linked M&S savings account where you can earn 6 per cent AER gross on balances between £25 and £250 deposited each month (the payments need to be made by standing order from your M&S account).

This means in total, you can earn an additional £96.63 of interest in the first year. The interest is calculated daily and credited annually at the end of the 12 month term.

M&S current account customers also receive an automatic £500 overdraft, the first £100 of which is interest-free and the remainder is charged at 15.9 per cent EAR.

The other benefit is that you can earn loyalty points by using your debit card with one point earned for every £1 spent instore or online at M&S. Customers receive £1 in M&S vouchers for every 100 points earned.

How good is the offer?

M&S previously ran this offer in January and again, this is a limited time incentive. However, M&S could not confirm to YourMoney.com how long it would last.

This time round, the Personal Savings Allowance is in effect, essentially meaning that many people won’t pay any tax on their account interest.

Another good thing about the M&S linked monthly savings account is that if you save less than the maximum £250 in any given month (as long as you pay in a minimum of £25 per month), M&S confirms you can carry over any unused allowance to the following months. For example, if you only save £100 in month one, you can save £400 in month two.

Andrew Hagger of Moneycomms said when you look at the potential value of the first year package, the M&S Bank Current Account gives you the chance to earn more than any competitor account when you weigh up the combined value of switching incentive, first year incentive and monthly savings interest.

However, if you have a larger credit balance the Santander 123 would pay more than M&S in the first year.

Hagger said: “You’d need a balance of £12,500 plus to beat the overall M&S current account return when you weigh up the impact of the Santander 123 £5 monthly fee.”

“If you’re someone who uses an overdraft, the competitive 15.9% EAR borrowing rate (first £100 interest free) makes the M&S Bank current account the second most competitive for borrowing costs when assessed against a range of borrowing scenarios for agreed overdrafts of between £400 and £2,000 and for borrowing periods of between 4 and 12 days per month.”

He added that for customers who dip into an agreed overdraft from time to time, the overdraft tariff is competitive too and second only to First Direct, so “it’s a good all-rounder”.

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