SPORTS DIRECT AND TO THE POINT

22 FEATURE WEDNESDAY 8 JUNE 2016
CITYAM.COM
PERSONAL FINANCE
FREE MONEY
FROM THE
BANK
Several are paying £100 or more to newcomers –
but hurry, these deals are dwindling
Annabelle
Williams
BANKS are offering customers
free cash for switching their
current accounts. The UK’s
big four – Barclays, HSBC,
Lloyds and RBS – have been
shaken up by the arrival of newcomers,
from online-only “challenger”
banks to European giants. Banks are
working harder to draw customers,
with several offering between £100
and £200 to newcomers.
“It appears free-in-credit accounts
are becoming reward-in-credit
accounts. In essence, this means... the
bank will pay customers for using
them,” says Brian Brown from industry
specialists Defaqto.
Their research says one-off bonuses
are on the decline, so savvy customers
should make the most of them while
they last. It may be worth switching
between them from time to time – it’s
an interesting way to try out different
banks’ services too as they vary widely.
Some give customers preferential
rates on savings accounts and mortgages.
Alongside the one-off cash payment,
some are also handing out small
monthly credits. The Co-op Bank and
Halifax offer around £5 a month
through their incentive programmes.
While it’s a small amount, it’s worth
thinking of this £60 a year as extra
interest – useful at a time when many
savings accounts are paying next to
nothing.
HOW TO CHANGE BANK
Changing bank accounts is much easier
these days. The UK now has a
seven-day switching service which
means, after the forms are filled in,
the onus is on the new bank to shift
all incoming and outgoing payments
to your new account. This includes
direct debits, bill payments and
incoming salary and pensions payments.
It will all be done within
seven working days, and the old
account will be closed too. See more
at the official website,
Simplerworld.co.uk.
It’s aimed at improving competition
in the sleepy world of banking, where
nearly 60 per cent of people have
been with the same bank for over 10
years. Around 70 per cent of people
have their account with one of the
Big Four – Barclays, HSBC, Lloyds and
RBS.
To qualify for any cash bonus, typically
customers will have to switch
over fully to the new bank and pay in
a minimum amount monthly.
Usually customers will have to transfer
over direct debits too – this can be
as many as four, and standing orders
don’t count.
A tip for people who don’t have sufficient
direct debits: set up a “minimum
payment” to a credit card. Even
if the balance on the credit card is
zero, and the card company takes
nothing each month, it still counts as
an active direct debit.
CASH BONUS
HSBC is among the most generous. It
offers £150 to switch to its HSBC
Advance account, plus a further £50
bonus when the account’s been open
for a year. The offer runs until 10 July.
Two direct debits must be switched,
and customers will be given a 0 per
cent overdraft for six months.
Customers can also qualify for a savings
account with a 6 per cent interest
rate. The minimum monthly deposit
is relatively high, at £1,750 a month
(which equates to a £26,300 salary) or
£10,500 every six months.
First Direct is also giving newcomers
£100 for signing up to its 1st Account,
alongside eligibility for a savings
account paying 6 per cent interest and
a free overdraft. In an unusual twist,
First Direct will also give unhappy customers
£100 when they leave, between
six months and year after joining.
That said, this bank does have the
highest approval rating of any surveyed
by the Money Saving Expert
website. Ninety-two per cent of its customers
say it’s great.
There is also a £10 monthly fee for
this account, but it’s waived each
month if £1,000 is paid in. Not an
issue for people in regular work.
FREE CASH AND ON-GOING
BONUSES
The Co-op Bank pays £150 to switch to
its Standard Current Account.
Customers can also join its reward
programme which pays up to £5.50 a
month (over £60 a year) as a cash
bonus for doing ordinary things with
the account such as paying in a salary,
using online banking and paying by
debit card. It’s also attractive as an
ethical bank. To qualify, people must
switch four direct debits, and there’s
no minimum amount to pay in each
month.
Meanwhile, Halifax gives new customers
£125 for signing up to its
Reward account. This offer runs until
18 July. There’s also an ongoing £5 per
month bonus which is paid to customers
who, again, do very average
things with their account including
paying in £750 each month, staying in
credit and keeping two direct debits
active.