Best buys that are only for banks and building societies' existing customers

It could be worth switching your bank account to land a market-leading deal that's 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 most prevalent. Six 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.

*HSBC Premier account customers only

**First Direct 1st account customers only

***Barclays current account customers who've held an account for at least nine months and paid in at least £1,000 a month only

****Lloyds Bank/Bank of Scotland current account customers only

*****M&S Bank customers only

HSBC is offering a rate of 3.9% on loans between £7,000 and £15,000 for existing current account customers, or on loans between £7,000 and £25,000 for Premier account customers. The rate is the lowest ever offered on a loan.

After HSBC, First Direct offers the next best deal. However, you need to have a 1st Account to get its 4% rate (which applies on borrowing between £7,000 and £25,000), 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 the option of 0% on balance transfer for 26 months for a fee of 2.4% or 15 months for a low fee of 0.55%, as well as 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 on flight, hotel or holiday bookings (the latter for a limited period), 2% at department stores and 3% at petrol stations, and on National Rail and Transport for London purchases.

Yes, it's available to all, though it comes with a £24 annual fee. But that fee is scrapped for the first year if you have a Santander 123 Current Account, which also pays up to 3% cashback on certain Direct Debits as well as up to 3% interest on balances up to £20,000.

Savings and ISAs

First Direct’s Regular Saver pays a whopping 6% to customers with 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 Flexclusive ISA is exclusively available to FlexAccount, FlexDirect and FlexPlus current account customers. It pays a rate of 1.75% on anything from £1 to this year's new Cash ISA limit of £15,000, which is the second best around.

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 4% 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.

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