SWITCHING current accounts has long been an easy way to pocket free cash from banks luring in new customers.
Other perks, like free travel insurance, interest-free overdrafts and cashback, could also make shifting providers worth your while.
Knowing when to switch bank accounts is vital to help ensure you don’t miss any regular bill payments
Currently, three major banks are offering new and existing customers free cash worth up to £200.
NatWest and the Royal Bank of Scotland (RBS) are offering newbies £200 to switch, and Lloyds Bank is offering new customers £175.
Sam Richardson, deputy editor of Which? Money, said: “Switching bank accounts has never been easier, with the Current Account Switch Service (CASS) doing most of the heavy lifting for you.
“Better still, many banks offer three-figure cash rewards to switch to them.”
Under the Current Account Switching Service (CASS), customers can pick their switch date and leave it to the banks to move any active direct debits to their new account.
But Sam said: “While it has become easier to change banks, there are still things to consider when it comes to the time you switch.
“It can’t be a weekend day or a Bank Holiday and must be at least seven working days after your account has been opened.
“If you have important direct debits coming out, such as a mortgage or rent, then you’ll need to avoid clashes with those.”
How do I switch bank accounts?
SWITCHING bank accounts is a simple process and can usually be done through the Current Account Switch Service (CASS).
Dozens of high street banks and building societies are signed up – there’s a full list on CASS’ website.
Under the switching service, swapping banks should take seven working days.
You don’t have to remember to move direct debits across when moving, as this is done for you.
All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.
There are a few things you can do before switching though, including choosing your switch date and transferring any old bank statements to your new account.
You should get in touch with your existing bank for any old statements.
When switching current accounts, consider what other perks might come with joining a specific bank or building society.
Some banks offer 0% overdrafts up to a certain limit, and others might offer better rates on savings accounts.
And some banks offer free travel or mobile phone insurance with their current accounts – but these accounts might come with a monthly fee.
We’ve listed some of the best bank account switching perks depending on your preferences below.
Best for free cash
NatWest and the Royal Bank of Scotland (RBS) are offering newbies £200 to switch their current accounts to an Everyday, Reward or Premier account using the CASS.
You’ll also have to deposit £1,250 into your new current account and log in to the mobile banking app within 60 days of switching.
Once you’ve done this, the money will be paid into your account within seven days.
You won’t be able to switch if you received a switching incentive from the NatWest Group, which RBS is part of, since January 1, 2020.
Customers switching to NatWest or RBS’ Reward bank account can earn up to £5 cashback when using the card, but have to pay a £2 monthly fee.
The Everyday current account from both banks doesn’t offer cashback but is fee-free.
Meanwhile, there are three Premier accounts to choose from: Premier Select, Premier Reward and Premier Reward Black.
There’s no monthly fee for the Premier Select account but a £2 and £31 monthly fee for the Premier Reward and Premier Reward Black accounts, respectively.
Lloyds Bank gives a £175 cash bonus to anyone who switches to one of four current accounts.
Lloyds’ offer is only available to customers who switch to a Club Lloyds current account.
Customers can switch from any current account to Lloyds but must do so by March 28 to avoid missing out.
They’ll then need to move two direct debits to qualify for the free cash paid within ten working days of the switch starting.
However, there is a catch as the Club Lloyds Bank Account comes with a monthly fee of £3 unless you pay in at least £2,000 every month.
Best for overdrafts
Overdraft debts can easily add up, so if you’re prone to slipping into the red, ensure you have an account with the lowest possible fees.
First Direct’s fee-free 1st Account offers an interest-free arranged overdraft on balances up to £250.
New customers of Nationwide’s fee-free FlexDirect account will get interest-free arranged overdrafts on balances up to £1,500 for the first year of the account opening.
Remember, an interest-free overdraft should only be used in an emergency or to tide yourself over during an expensive month.
Best for cashback
You can make free money from banks with great cashback perks.
The Santander Edge account pays one per cent cashback on selected household bills and travel spending.
Bear in mind, earnings are capped at £20 a month and the account comes with a £3 monthly fee.
The app-only Chase current account also pays customers one per cent cashback on most debit card spending.
You can get up to £15 a month in cashback without a monthly fee.
Best for savers
Switch current accounts and you can access top saving rates.
For example, those opening a Santander Edge account get access to a linked saver, which pays seven per cent interest on pots up to £4,000.
And Barclays fee-free bank account customers can join its Blue Rewards scheme and apply for a linked Rainy Day Saver which pays 5.12 per cent interest on up to £5,000.
Best for frequent travel
Virgin Money’s Club M account costs £12.50 a month or £150 a year, but you get free worldwide travel insurance when you switch to the account.
On top of this, you’ll get free mobile phone insurance, plus UK and European breakdown cover with AA, which usually costs more than £150 a year.
The free services could save you cash if you’re a driver and frequent traveller.
But do your sums carefully to ensure it’s a good deal for your circumstances.