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The deals worth switching banks for
Some of the best rates and offers are only available to existing customers
Banks and building societies offer a variety of incentives to switch your business to them, from welcome bonuses to overdrafts to credit interest rates. Indeed, some of those interest rates thrash the best savings rates right now.
The arrival of the seven-day current account switch has only heightened that competition for business. There’s also one other major way they are trying to entice us and that’s through offering market-leading rates to existing customers.
Let’s take a look at what’s on offer.
Personal loans
When it comes to personal loans a fair few lenders will only offer their best rates to existing current account customers.
For larger amounts between £15,000 and £25,000, the trend is even more prevalent. Seven out of the top 13 rates are reserved for current account customers.
Here are the best buys for a £17,500 loan repaid over five years.
Lender |
|
Representative APR
Total amount repayable
Sainsbury's Bank Shopper Standard Loan
£20,545.80
*Barclays current account customers who've held an account for at least nine months and paid in at least £1,000 a month only
**First Direct 1st account customers only
***Lloyds Bank/Bank of Scotland current account customers only
****M&S Bank customers only
*****HSBC current account holders only
The best rate is only available to existing customers and comes from Barclays. You need to have held a Barclays current account for at least nine months and have paid in at least £1,000 a month to be in with a chance of qualifying for a rate of 5.9%.
First Direct is offering a rate of 5.1%, which is still very competitive. You need to have a 1st current account to get this rate, but this is one of the top accounts around, certainly in terms of customer service, so it could well be worth switching. You’ll also receive a nice £100 welcome bonus.
Credit cards
There are a couple of credit cards that are only open to bank or building society customers that are arguably the equal if not better to those that are open to all.
The Nationwide Select credit card doesn't charge fees for foreign use and also pays 0.5% cashback on purchases. The card also offers 0% on balance transfer for 26 months for an incredibly low fee of 0.75%, and interest-free purchases for 15 months to boot. So it's a decent all-rounder if you only want to carry one card. Select is only open to Nationwide FlexAccount, FlexDirect and FlexPlus current account customers.
The Santander 123 credit card is one of the best cashback cards out there, paying 1% cashback on supermarket shopping and Amazon.co.uk (the latter for a limited period), 2% at department stores and 3% at petrol stations, and on National Rail and Transport for London purchases. If you have a Santander 123 current account, which also pays cashback on some Direct Debits and interest on balances up to £20,000, your 123 credit card is free of its £24 annual fee for the first year.
Savings and ISAs
First Direct’s Regular Saver pays a whopping 6% to customers of its 1st Account.
Similarly, HSBC’s Regular Saver pays 6% to customers of its fee-paying current accounts and 4% to Bank Account, Bank Account Pay Monthly and Graduate Bank Account customers.
Norwich & Peterborough Building Society also pays 4% on its regular Gold Savings account, but you need to be a Gold Classic Current Account customer already and pay in at least £500 a month during the 12-month savings period.
ISA-wise, Nationwide's Flexeclusive ISA is exclusively available to FlexAccount, FlexDirect and FlexPlus current account customers. It pays a market-leading rate of 1.75% on anything from £1 to this year's Cash ISA limit of £5,760.
HSBC has also launched a Loyalty ISA which pays up to 1.6%, providing you put some money into your ISA each year, and you hold one of the bank's current accounts.
Junior ISAs
Arguably the most well-known cash Junior ISA is Halifax’s, which pays 6% if you hold an adult Cash ISA with Halifax as well, or the child is aged 16-18.
Mortgages
Already being a current account customer can be advantageous when it comes to getting a mortgage offer, as you have a financial track record your bank or building society can look at.
Most banks and building societies offer special mortgage rates for their banking customers, although these are usually not the most competitive on the market. They also may offer mortgages with cheaper fees, so it's always worth asking what's on offer when you're shopping around.
[Compare top current accounts]
