Co-op Bank is offering £200 if you switch your current account. It's the best switching deal on the market!
If you’re fed up with your bank, take a good look at the Co-operative Bank. It runs some attractive current accounts and you could get a £200 reward if you switch to one of them.
To get the £200, you need to do a ‘full switch’ from your existing bank. That means you must transfer all your existing standing orders and direct debits. You’ll also need to pay at least £800 a month into your account for the first three months after opening. Once you’ve done that, you’ll get your £200 reward.
Interestingly, the offer isn’t just for new customers. If you already have a current account with the Co-op, you may still be eligible for the £200 reward. If you’re currently paying some direct debits and standing orders via another bank, shift them over the Co-op and you could get £200.
Rivals
Co-op isn’t the only bank to offer a cash reward for switching, so let’s look at the rival switching offers from Santander and First Direct.
In some ways, Santander’s offer looks more attractive than Co-op’s. That’s because some switchers to the Santander Preferred Current Account could get a £300 reward. But to get the full £300, you’ll need to already have a mortgage and a savings account with Santander. And the savings account must contain at least £10,000!
If you have a mortgage but no savings account, Santander will pay you £200. If you have neither, you can still get £100 from Santander. But by contrast, you could get £200 from the Co-op with no mortgage or savings account.
What’s more, with Santander, you have to pay in £1,000 a month to be eligible for the reward whereas you only have to pay £800 a month with Co-op. So Co-op easily beats Santander in my opinion.
As for First Direct, it offers £100 to all switchers to its 1st Account, and you need to pay in £1,500 a month to get the reward. So once again, Co-op comes out top.
Accounts
So far, we’ve just looked at the switching offers, not at the underlying accounts, so are Co-op’s accounts any good?
Well, the first thing to say is that Co-op’s customers are happy with their bank. In our most recent lovemoney.com awards, Co-op Bank ended up in second place for both customer service and for best overall current account provider. First Direct was the only bank to beat Co-op in both categories.
Co-op is also known for being an 'ethical bank' - it will not invest in businesses that operate in 'areas of concern' to its customers, such as the manufacture of cluster bombs or businesses whose core activities contribute to climate change.
What’s more, Co-op offers two decent current accounts where you won’t have to pay any account charges - the Co-operative Bank Current Account Plus and the Standard Current Account. With the Plus account, you get a fee-free £200 overdraft as well as some exclusive mortgage deals.
Co-op also offers two premium current accounts which are eligible for the £200 reward – the Privilege Premier Current Account and the Privilege Current Account. With these accounts you can get extra goodies such as travel insurance for a year and a discount on home insurance.
However, you also have to pay a monthly fee to get these goodies, so most people are better off going for one of Co-op’s free accounts.
Interest
Interest payments is one area where Santander is strongest. If you open a Santander Preferred Current Account, you’ll get 5% interest on any money you have in your account up to £2,500. However, you’ll only get this interest payment for the first year you have the account.
Sadly, neither Co-op not First Direct pay any interest on money held in their current accounts, so that’s a real downside for both banks.
Overdrafts
Santander is also pretty attractive when it comes to overdrafts. For the first year after you open the Preferred account, you won’t have to pay any interest on your existing overdraft. (That’s up to £5,000.)
With First Direct and Co-op, you just get fee-free ovedrafts up to £250.
Other accounts
So far in this article, I’ve just looked at accounts which offer the best rewards for switching. Rewards aren’t everything and, depending on your circumstances, you may be better off with a different current account even if there’s no reward for switching.
In particular, I’d urge you to look at the Halifax Reward Account and the Lloyds TSB Current Account with Vantage.
The Halifax account doesn’t pay any interest on credit balances, but as long as you pay in £1,000 every month, Halifax will pay £5 into your account every month. Nice.
The Lloyds account is attractive for people who keep a lot of money in their current accounts. If you have between £3000 and £5,000 in your account, you’ll get 3% interest on your cash.
So that’s a round-up of the best current accounts on the market at the moment. And if your priority is to get a decent cash reward right now, then the Co-op’s accounts tick a lot of boxes...
Postscript: After this article was published, Co-op announced that this £200 switching offer was no longer available to customers who open a current account by phone or online. However, you can still get a £200 reward if you open a current account at a Co-op branch.