Halifax brings back £125 switching offer – but is it the best deal for moving current accounts?
Halifax boasts of being the most switched to bank on the high street, and its cash incentive is a big draw for many new customers
HALIFAX has reintroduced its £125 cash bonus for those who switch their everyday banking to its Reward current account.
New customers will find the £125 freebie in their bank account once the seven-day switch is complete.
The Reward current account also gives customers a £3 monthly reward if they can pay in £750 a month, and have at least two direct debits set up on the account.
The £125 switching bonus is only being offered until July 31, so you'll need to act fast if you want the freebie.
But is it the best deal?
Halifax boasts of being the most switched-to bank on the high street, and its cash incentive is certainly a big draw for many new customers.
It's Reward account is especially good for lower earners because it is free to run and offers a £3 reward for those who can pay in £750 a month.
MOST READ IN MONEY
Other banks pay higher switching bonuses for new customers, but those typically aren't as good in the long run.
HSBC, for example, pays £150 to new customers (until July 23) and an extra £50 if you stay for a whole year.
But the bank requires a huge minimum pay-in of £1,750 a month, plus two direct debits.
"Britain's most recommended bank" First Direct also pays £125 to new customers who apply via this link, plus an extra £100 "leaving present" if you decide to ditch the account after six months.
Again, the account requires customers to pay in a fairly high monthly deposit of £1,000, or there is a £10 monthly account fee to pay (after the first six months).
How do I switch bank account?
MOST banks will require new customers to switch using the free Current Account Switch Service.
This programme takes care of the bank switching process for you by moving all your incoming and outgoing payments, moving your outstanding balance and closing your old account.
The majority of banks are signed up to the service so you’ll use it automatically when applying and switching to a new account via the bank’s website or in branch.
The guarantee means that if anything goes wrong with the switch you will be refunded for any financia losses incurred.
Lastly, M&S Bank will reward new customers with a £125 gift card to use in-store or online, and there's no minimum pay-in.
If you can pay in at least £1,000 month, customers can get another £5 added to their gift card each month for the first 12 months.
Altogether, new customers will get £185 in “freebies” – made up of the £5 monthly reward and the £125 gift card.
Is switching worth the hassle?
Switching bank accounts does require some effort, but yes it is worthwhile to switch if the bank you’re switching to offers a higher rate of interest than you’re currently getting, good perks (such as free travel insurance) and has good customer service.
Switching just for the cash perk when you’re with a bank that offers good service, low overdraft rates and decent interest, may not be the right decision for you.
With the Current Account Switch Service it’s relatively easy and hassle-free to switch, because they take care of the whole process for you and have an obligation to switch your current account with seven working days.
If the switch takes longer and you lose money as a result – such as a direct debit not being paid and you’re charged a fee – they have to refund you.
The accounts that pay the most interest
IN the current climate of low interest rates, savers are turning to current accounts to earn interest on their money.
You can get up to 5 per cent with some accounts, but they come with catches.
- Nationwide’s FlexDirect account pays 5 per cent on balances of up to £2,500, but only for the first year. After 12 months, the rate drops to a lowly 1 per cent.
- Santander pays 1.5 per cent on balances up to £20,000, but there’s a £5 monthly fee. The 3 per cent cashback on utility bills offered by the account often covers this fee.
- Bank of Scotland offers up to 2 per cent interest on balances up to £5,000. Customers will need to pay in £1,000 each month and have two different direct debits set up on the account.
- Tesco Bank pays 3 per cent on balances of up to £3,000. There’s no minimum pay-in on the account to get the interest and customers will also earn ClubCard points for purchases made with the debit card.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at [email protected] or call 0207 78 24516