Make £100 in 10 minutes
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Savers and borrowers alike may not be getting much from their banks right now, but the current account market is hotting up and some banks are willing to give you rewards just for switching.
Right now, there are four banks offering cashback as a switching incentive.
Alliance & Leicester Premier account – make £100
Aside from the generous £100 cashback incentive, the Alliance & Leicester Premier account has a highly competitive overdraft facility offering a 12 month 0% overdraft, after which it charges 50p per day for an agreed overdraft, up to a maximum charge of £5 per month.
This account also comes with a handy free annual multi-trip European travel insurance, worth up to £60. There’s also a £50 referral bonus up for grabs for you to share with a mate if you recommend an A&L account to them and they go on to switch to it. And, although it’s not much, if you’re in credit you can make 0.5% AER on balances up to £2,500.
Perhaps an even bigger incentive is that existing customers of the Alliance & Leicester Premier account can apply for the Santander Zero card which offers an impressive 12 months at 0 per cent interest on balance transfers with no fee to pay.
Why it’s not so good
You must pay in at least £500 a month to secure the £100 cash bonus or you’ll face a £5 per month underfunding fee.
Also, if you’ve held an account with Alliance & Leicester, Abbey, or even the internet bank Cahoot in the past three months you won’t be able to take advantage of the £100 cashback offer because they are all are now part of the Santander banking group.
First Direct 1st Account – make £100
First Direct’s 1st Account offers a £250 interest free overdraft, with 15.9% payable above this amount (which compares favourably to the likes of HSBC charging 19.9% and Natwest charging 19.24%).
First Direct also has a good track record for customer service. In fact, they are so confident that they promise to give any unhappy customers another £100 to switch to a different bank, if they aren’t happy after six months (as long as they have paid in at least £1,500 a month for six months).
As an added bonus, First Direct current account customers can access the Regular Saver which pays 5% AER fixed for 12 months on regular monthly deposits of between £25 and £300. If you were able to save the full £300 per month for 12 months you’d get around £97 gross (£78 net) in interest at the end of the 12 months.
Why it’s not so good
First Direct has the strictest conditions of all these accounts, requiring you to deposit at least £1,500 for the first three months to get the £100 cashback. Then in any month that this minimum is not kept up you’ll be charged £10 just for holding the account.
If you can’t guarantee paying in, or maintaining a balance at £1,500, choose an account which requires either no minimum funding, or a deposit you know you can afford.
Halifax Reward account – earn £5 per month
The best thing about Halifax Reward’s £5 monthly incentive is that although you must pay in at least £1,000 per month, you don’t have to maintain that balance to reap the reward. So, whether you’re in credit or overdrawn, you can rely on making £5 every month.
It is also worth noting that this is a fixed, ongoing reward – so unlike the incentives offered with the other accounts, you can potentially make £5 per month for the lifetime of the Halifax Reward account.
Why it’s not so good
Where this account falls down is in its authorised overdraft charges. If you’re overdrawn by up to £2,500 you pay a daily fee of £1, instead of monthly interest. If you’re in the red by over £2,500, you’ll be charged a whopping £2 a day. And, if you go overdrawn without permission, Halifax will charge an eye-watering £5 per day, so if you find yourself regularly relying on an overdraft you should steer clear of this account.
Also, if you’re income is sporadic and you cannot guarantee depositing at least £1,000 per month but you’re still in-credit for most of the time, there may be better alternatives. For example, the Premier Direct account from Alliance & Leicester pays an impressive 6% AER on the first £2,500 in your account for 12 months (after this it falls to 1%).
A word of caution…
Don’t think these accounts are your only option – I just wanted to give you the lowdown on the various cashback deals around at the moment. Remember to compare other current accounts too as they may be more suitable for your specific needs.
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