High street banks price war
New switching bribes mean for the first time 5 banks have entered the fray
The start of 2012 has seen three big high street banks launch new or boosted incentives, aimed at signing up customers. An unprecedented five have hardcore promotions vying for the coveted best-buy crown — including one of the traditional big 4, who normally steer clear of these skirmishes.
The banks battling for business (all have no monthly fee)…
Halifax£100 cash + £5 per month.(Min monthly pay in: £1,000) The Halifax Reward account gives a £100 bonus plus £5 each month you deposit £1,000. Don’t go overdrawn or you’ll face £1 a day charges.
First Direct £125 cash + top customer service rating.(Min monthly pay in: £1,500) The First Direct 1st account gives a £100 intro bonus, plus an extra £25 if you switch via comparison site MoneySupermarket.com, £250 0% overdraft (15.9% above that), though no in-credit interest.
Santander £100 cash + a year’s 5% interest + 0% overdraft.(Min monthly pay in: £1,000) The Santander Preferred current account gives a £100 bonus, a year’s 0% overdraft (then 50p/day, max £5/month) and 5% in-credit interest on up to £2,500 for a year.
HSBC 6% interest for a year. (Min monthly pay in: £500) New or existing customers who haven’t used the switching service for the HSBC Bank account can get 6% in-credit interest on up to £2,500 for the first year (other accounts charge a monthly fee, so ensure you choose this one) .
Nationwide free European travel insurance. (Min monthly pay in: £750) New and existing Nationwide Flexaccount customers get free European multi-trip travel insurance (up to age 75).
Martin Lewis, creator of MoneySavingExpert.com, comments:
“Finally there’s a chink of light in the current account market. Competition is starting to sizzle — at least for those with decent credit scores and within their overdraft limits. Most interesting is HSBC’s involvement as it’s one of the big four, who usually rely on the legacy of their huge customer bases from a bygone age of banking. Hopefully that dominance is ending and banks are starting to realise if they want to keep good customers they can’t get away with paying pitiful interest and giving bog-standard service.
“For customers this is a huge boon. Banks are trying to bribe you to switch — delight in it and shove the cash happily into your back pocket. Switching is much easier than it used to be, direct debits and standing orders are moved for you, though always ensure people who pay you know your new details. For safety keep the old account open for at least three months, with a small amount of funds in as a safety net.”