Make £300 by switching current accounts

Just by moving your bank account to Santander, you can pocket as much as £300!

Everyone likes to make a bit of extra money, for only minimal effort. And a new deal from Santander, launched today, allows you to do just that.

New customers taking out the bank’s Preferred, Reward or Premium current accounts will be able to nab between £100 and £300 in cashback as a welcoming gift.

If you don’t have any existing relationship with Santander, then you’ll qualify for the £100 cashback, as before. However, if you have your mortgage with Santander already, then the cashback you can expect is doubled up to £200.

And if you have your mortgage with Santander, and either have, or can, deposit at least £10,000 in savings with Santander, then switching your main current account to the bank will see you get a whopping £300 in cashback!

To qualify, you’ll need to move over your direct debits and pay in £1,000 a month.

Great news if you already have a mortgage with the bank, and still decent cashback if you are completely new to Santander. But are the accounts any good?

Preferred current account

The Preferred current account is a pretty spectacular account, paying a rate of a whopping 5% AER for 12 months on all balances up to £2,500. You won’t find another current account paying such a high rate of interest. In fact, you’ll struggle to find a savings account paying a rate like that!

However, it’s not just a terrific account for people who finish every month in the black – it’s also one of the best accounts around for people who need to make use of an overdraft.

The Preferred current account offers a free arranged overdraft for the first 12 months of up to £5,000. Santander promises to match your previous overdraft up to that level, depending on circumstances. Again, you’ll struggle to find such an attractive offer elsewhere.

Reward current account

Santander’s Reward current account offers the same rate as the Preferred account on balances up to £2,500, while you won’t have to pay a penny on any arranged overdraft for four months.

However, you’ll also get a package of extras which Santander reckons is worth £400.

These include:

Annual worldwide family travel insurance
Green Flag car breakdown cover
Identity protections, including up to £50,000 of insurance cover to help recover your identity after identity theft
Card loss assistance
Key protection – up to £1,500 for replacement locks and keys if keys are lost or stolen
Exclusive personal loan deals
Commission-free travel money, with free delivery

However, there is a price to pay for all of these extras, in the shape of a £10 monthly fee. Personally, I’m not a massive fan of packaged accounts like this, as you need to make use of a number of the features to make it worth the money you’ll be shelling out. However, if you really need travel insurance, car breakdown cover and don’t fancy paying commission for your travel money, it may work out as a decent deal for you. Just check the small print of the insurance policies - often the cover on offer is not particularly generous.

Premium current account

Once again, with the Santander Premium current account you can expect a market-leading rate of 5% on any balance up to £2,500 over the first 12 months, while there will be no fees on your interest-free arranged overdraft for the first four months.

However, what differentiates the Premium account is the sheer amount of added extras you get, going beyond even the Reward account. For a monthly fee of £20, Santander reckons you’ll enjoy benefits worth more than £890!

You get all of the extras of the Reward account, but with these on top:

Health Benefits from AXA PPP healthcare
Mobile phone insurance, providing worldwide cover against loss, theft, breakdown and damage
Legal assistance
Will writing service
Airport Angel
Concierge service

Clearly, if you do a lot of travelling, the features of this account may be right up your street.

A question of service

Inevitably, whenever you discuss Santander, the conversation will eventually hit upon the bank’s biggest weakness: its customer service. The bank is well known for its poor service, and regularly comes bottom in customer surveys. So while that £300 may be extremely tempting, be sure to go in well aware that the service you receive may not be the best.

That said, I’ve had a Santander account for a year and have had no complaints, so perhaps Santander’s attempts to improve the service it offers are starting to take effect.

The 1st class alternative

Of course, Santander is not the only bank that will pay you for taking out its current account. And what’s more, its rival is in many ways Santander’s polar opposite – it’s built its entire reputation on offering peerless customer service. And that rival is First Direct’s 1st Account.

The 1st Account doesn’t look too special on paper. You don’t get any interest on your money, and unless you are able to pay in £1,500 a month you’ll have to pay a monthly fee for the account. On the plus side there is a £250 interest-free overdraft to enjoy.

However, what sets the account apart from its competitors is the customer service that First Direct provides. From a brilliant online banking service, to helpful call centres where the people you speak to take ownership of your issues, the 1st Account wins every customer service award going, and with good reason.

And you’ll be paid to enjoy that service. £100 heads your way upon opening the 1st Account, with a further £100 if you choose to leave after a year. So if you want an account with a bank that you know you can always rely on, you don't need to look any further!