Spotlight on Marks and Spencer’s new current account rewards offering
The high street retailer has thrown down the gauntlet to the big players in the current account market by revamping its rewards offering for a limited period. Here’s what you need to know.
Customers who switch to a M&S Bank current account could receive a gift card worth up to £220 in their first year if they hit certain criteria as part of the retailer’s new rewards offering.
From today new customers who fully switch their current account to any of M&S Bank’s current accounts will get a £100 gift card – the standard reward it’s already been offering.
But they’ll also get £10/month (credited to the gift card) for the first 12 months if they pay in a minimum of £1,000/month and, as long as they set up two direct debits when they switch.
These customers will also be able to open a linked M&S savings account where they can earn 6% AER on a maximum balance of £250/month (£96.63 gross) which means in total, new switchers can net up to £316.63 in their first year of opening the account.
After the first year, they’ll no longer receive the additional £10/month reward.
This is a “limited time offer”, though M&S Bank wasn’t able to say when it’s due to be revised.
How does it compare to other current account reward schemes?
Andrew Hagger of Moneycomms reviewed M&S’s offering against other banks and building societies reward schemes.
Based on the first year incentive, the M&S current account gives customers the chance to earn more than any of its competitors when you consider the switching incentive (£100), first year incentive (£120 made up of 12 months x £10) and the monthly savings interest (6% AER on maximum balance of £250).
Hagger said: “The research shows that if you meet the monthly income criteria and use the monthly savings option to the max, then M&S Bank offers the greatest financial payback over the first 12 months. In subsequent years, customers who have switched to the M&S Current Account can open a new 6% monthly saver each year, meaning the account still compares favourably.”
On incentive schemes in general, he added: “A fiercely competitive UK current account has seen an increase in the use of incentives and rewards by banks and building societies to win new customers.
“Initial switching payments of between £100 and £150 have become more prevalent in recent years but we’re also now seeing more banks turning to a rewards package subject to signing up for an account with a monthly fee.”
What others are saying…
Tashema Jackson, money expert at uSwitch.com said: “It’s great to see high street retailers throw down the gauntlet to the big players in the current account market. This offering from M&S, our 2015 uSwitch Current Account Award Winner, will greatly appeal to their shoppers who may find a switching incentive of up to £220 in M&S vouchers over the first year a real help if they are tightening the purse strings this January.
“While this is a competitive offering if you shop regularly with M&S, it’s worth remembering that for those with a different supermarket preference there are many other current accounts that may be more suitable, particularly those who travel frequently, those looking for cashback, and for people frequently overdrawn.”
Which M&S current account can I open?
Customers who switch using the Current Account Switch Service (CASS) can opt to open one of two M&S current accounts: the free M&S current account or the M&S Premium current account which costs £10/month and comes with a range of benefits, including £40 a year in M&S vouchers to spend in store on clothing and homeware, £45 worth of ‘treats and delights’ vouchers and £127 worth of hot drinks vouchers for the M&S Café.
Both current accounts also come with an automatic £500 overdraft, the first £100 of which is interest-free and the remainder is charged at 15.9% EAR.
How and when do I get my gift card?
M&S said customers will receive their £100 gift card – a physical card – within one calendar month of switching to its current account. The additional £10/month reward will be automatically added on to the existing gift card so customers don’t need to go to store or do anything to top it up.
The gift card can be used in store and online at M&S.
What if I don’t hit the £1,000/month pay in?
If you’re not able to pay in the £1,000/month in any particular month, you won’t receive the £10 gift card for that month only.
So if the following month you do hit the minimum pay-in, you will still get the £10 gift card.