Halifax has brought back its £100 switching offer to new customers.
From today until 3rd March you can instantly pocket £100 when you request to switch to a Halifax current account.
The cash incentive is credited to the new account on the day you sign up, which is a bit unusual as other banks with similar schemes tend to make you wait a few months before handing over any cash bribes.
Last year the £100 switching offer attracted over 300,000 new customers, but this time round there is an added extra that could encourage more to switch.
12-month fee free overdraft
On top of the £100 incentive Halifax is now also offering switchers a 12-month, fee-free planned overdraft
Halifax estimates that someone switching with a £700 overdraft has the potential to save £137.55 in overdraft charges based on an average overdraft rate of 19.65%, but the savings could be much bigger once other overdraft charges banks levy are considered.
You won’t pay any charges or interest on your overdraft for 12 months as long as you arrange it with Halifax first - unplanned overdrafts will incur the usual charges.
The size of the overdraft is subject to status, but the maximum on offer from Halifax is £5,000.
For those looking to borrow cheaply this offer of up to £5,000, fee free for 12 months, is attractive as normally fee-free overdrafts either don't last very long or are only applicable on a small buffer value.
Santander for example offers four months fee free on its Everyday and 123 accounts, while Nationwide offers only a three-month interest-free period on its Flex and Flex Direct accounts. If you need an overdraft facility without a time limit Co-operative Bank's Current Account Plus comes with a £200 fee-free overdraft and First Direct's 1st Account has a £250 interest-free buffer that won't dissappear after a few months.
Why make the switch?
Apart from the cash incentive to join and the attractive planned overdraft, Halifax actually has some rewarding accounts that could leave you better off.
If you go for the Halifax Reward Current Account for example, you will get £5 paid into your account each month that you deposit £1,000. You get this reward even if you spend everything in your account that month. So if you make the switch this January you will pocket £160 in total this year.
There’s also the Ultimate Reward Current Account, which offers travel insurance, mobile phone insurance and AA Breakdown Cover for £10 a month.
Other switching incentives
But Halifax isn’t the only bank trying to entice new customers with a sizeable cash bonus.
With the 1st Account from First Direct you also get £100 for switching. To qualify you will need to deposit £1,500 per month (this must start to happen within three months of the account opening) and use the Easyswitch service to transfer at least two Direct Debits or standing orders to the account.
Although First Direct doesn’t pay the £100 switching incentive straight away like Halifax, the bank is so confident you will love the service it also has a £100 satisfaction guarantee. So after six months and within 12 months, if you’re not happy First Direct will give you £100 and help move your account. There's a good chance you'll like the service as first direct won the current accounts customer service award in the 2012 Lovemoney awards.
More rewarding accounts
But if you’re not too bothered about a cash bonus and are more interested in a rewarding account for the long-term you might be better off with the Santander 123 Current Account.
With this account you get paid tiered levels of cashback on direct debits.
You get 1% paid on water and council tax, 2% on gas and electricity bills, 3% on communication costs like broadband and 3% on mortgage repayments if the mortgage is with Santander.
The 123 account also offers in-credit interest of up to 3% on balances of up to £20,000 and a four-month interest-free overdraft.
But to benefit from the features you will need to pay a £2 monthly fee for the account which is a cost of £24 a year. So you will need to do a few calculations to work out if the Santander 123 account could really benefit your finances compared to the cost.