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More bank accounts offer free cash if you switch to them
The introduction of the seven-day Current Account Switch Service in September last year means it’s quicker and easier to ditch an unrewarding current account and move onto something better.
So banks and building societies have been slowly ramping up their incentives in a bid to attract new customers, as well as to hang onto existing ones.
Nationwide and the Co-operative Bank are the latest to up the ante. Both have launched new cash welcome offers to encourage more people to open one of their current accounts.
So let’s take a look at what’s on offer.
Co-op’s £125 offer
After a troubled year the Co-operative is trying to restore trust and win back customers with an enticing welcome bonus.
It's now offering new customers a £100 one-off bonus as well as £25 to donate to a charity of their choice when they switch to one of its current accounts.
Charities eligible for the donation include Action Aid, Amnesty International, the Carers Trust, Help the Hospices, Oxfam, Water Aid and the Woodland Trust.
To qualify for the £125 switching offer, new customers need to open either the Standard Current Account, Current Account Plus or smile Current Account and credit £800 within 31 days.
Existing customers can also take advantage of the £125 switching offer if they credit less than £800 a month into their account i.e. don’t already use it as a main account. All they need to do is complete a switch and credit £800 within 31days.
Co-op’s £100 cash welcome bonus is in-line with what’s already available from the likes of First Direct and Halifax. So do any of Co-op's accounts stand out?
Co-op’s current accounts
The Co-op offers three fee-free accounts that are eligible for the £125 switching offer.
With the Standard Current Account you get the basics: online banking, a free mobile banking app, free cash withdrawals in the UK and a contactless debit card. The account also gets you access to exclusive preferential rates on Co-op’s loans and Cash ISAs.
But the Current Account Plus gets you everything the Standard account has to offer, plus a £200 fee-free overdraft. And as well as preferential offers on loans and Cash ISAs you can also get access to an exclusive low-rate credit card.
Lastly the smile Current Account offers the same as a Standard account, but comes with a beefy £500 fee-free overdraft. You can also get access to exclusive rates on savings, Cash ISAs and access to a cashback credit card.
The Co-operative positions itself as an ethical bank taking pride in customer service. But after a rocky 2013 where it had to drop out of taking over 630 Lloyds branches, was downgraded by Moody’s, lost 70% of its banking arm to private investors and was engulfed in scandal about senior appointments, customers were turning away.
The bank is now fighting back. Steve Britain, Commercial Director at The Co-operative Bank, said: “We know we have a lot to do to restore trust in our business but with our capital position strengthened, we are able to begin to talk to customers again about the products and services we can offer them."
It's worth noting that both Co-op and smile consistently receive customer service accolades.
Nationwide’s £50 - £500 offer
So what has Nationwide brought to the table?
Well the building society has gone for a slightly different approach and has launched a Refer a Friend switching deal, worth £50 a time.
It applies when an existing FlexAccount, FlexDirect or FlexPlus customer recommends one of Nationwide’s current accounts to someone they know. If that person switches their main account to Nationwide using the Current Account Switch Service, both sides will receive £50.
It’s a unique offer as it rewards both existing and new customers and relies on existing customers being happy enough with Nationwide’s service to spread the word.
Existing Nationwide current account customers can recommend up to ten friends each year, so have the potential to earn £500 per annum.
If you don't already have a Nationwide account, while you don’t get a guaranteed bonus as soon as you complete a switch like with First Direct, Halifax and now the Co-operative, you have the potential to earn much more than with all of them combined if you can convince ten more to join you.
Nationwide’s current accounts
Nationwide offers three main accounts the FlexAccount, FlexDirect and FlexPlus. All three get you access to exclusive deals reserved for existing customers called Flexclusives which can get you better rates on savings, loans, mortgages and credit cards.
If you make the FlexAccount your main account you get free European multi-trip travel insurance, a three-month interest-free overdraft and access to Flexclusives as well as online banking and a free mobile banking app.
But you can get much more with FlexDirect. It offers 5% interest on in-credit balances up to £2,500 (which beats most of the top savings accounts around right now), a fee-free overdraft for 12 months and Flexclusives - all for free.
However, if you are prepared to pay £10 a month you can get FlexPlus which gets you 3% in-credit interest on balances up to £2,500, worldwide travel insurance, mobile insurance, breakdown cover, commission-free cash withdrawals abroad, a three-month fee-free overdraft as well as Flexclusives.
Picking a current account
Cash bonuses are a short-term benefit, so make sure you are happy with what an account offers in the long-term before you switch. If you want to earn interest on your money, then take a look at high-interest options too, as one of those could prove more rewarding over time.
