If you want to get £200 for switching your current account, you better get your skates on!
Last week the Co-op announced a cracking deal where the bank will pay you £200 if you switch your current account to the Co-op Bank.
It looks like the offer has been very popular because it’s already been partially withdrawn. Originally, you could get the deal if you opened an account online, on the phone or at a branch. But now you can only get the £200 reward if you open a current account at a Co-op branch.
It’s a great shame that Co-op has partially withdrawn the offer so quickly. It’s not the best way to build a brand that is truly loved by the British public. And given what has happened so far, even the branch-based £200 offer may not last much longer. So if you’re tempted to sign up, you should get cracking.
Of course, many people don’t live anywhere near a Co-op branch, so are there any other ways you could get a decent reward when you open a new current account?
Santander
Well, Santander is prepared to pay £200 to some current account switchers. If you already have a mortgage or a savings account with Santander, the Spanish bank will pay you £200 if you switch your current account. In fact, if you have both a mortgage and a savings account, you could get £300! However, you do have to have £10,000 in your savings account to qualify.
And even if you have no accounts or mortgages with Santander, you could still get £100 for switching.
What’s more, the Santander Preferred Current Account pays 5% interest on any balance up to £2500 for the first year you have the account.
However, you do have to keep your eye on the ball with this account. The big catch is that you have to pay in at least £1000 a month. If you don’t do that, you won’t get the 5% interest or the £100 reward. Even worse, you still have to pay in £1000 a month even after you’ve received the reward and you’re no longer getting the 5% interest.
One disgruntled Santander customer told us that he stopped paying in £1000 a month after the first year, and then found that he was being charged a £5 ‘under-funding’ fee every month. If you’re someone who doesn’t regularly check your bank statement, these fees could quickly add up.
So yes, you can get some cash by switching to Santander, but if you get to a stage where you can’t pay in £1000 a month, you should move your account immediately.
It’s also worth pointing out that Santander has a poor reputation for customer service.
First Direct
Your other option is to sign up for First Direct’s 1st Account. If you make the switch, you’ll be paid £100 as long as you pay in £1500 a month. (You won’t get the reward until you’ve paid £1500 for three months.) You can also get a £250 interest-free overdraft.
First Direct’s biggest plus point is that it has an excellent reputation for customer service and has won several awards for that. In fact, First Direct is so confident about its customer service, the bank will pay you another £100 if you close down the account within a year.
So you could get £200 from First Direct but you’ll have to go through the hassle of both opening and closing an account to get the cash.
On the downside though, First Direct doesn’t pay any interest on credit balances in the 1st Account.
Going forward
If none of these accounts really grab you, don’t lose heart. We’ll almost certainly see some more current account switching deals over the next year. The current account market is getting more and more competitive as banks outside the traditional ‘Big Four’ try and gain market share.
Competition will be drive by the launch of current accounts by Tesco Bank and at the same time other recent entrants will seek to gain market share. On top of that, another new bank may be created when Lloyds sells 630 branches to comply with an EU monopolies ruling.
So expect to see lots of fun and games in the months ahead. As more and more promotions appear, does it really make sense to stick with the same rubbish current account you’ve had for the last 20 years?