The bank that most rewards loyalty
We show you which bank has the most top-quality products for loyal customers.
Since the economy went bad, some banks have actually started to reward our loyalty in their desire to keep hold of their existing customers, the ones that they understand best.
Here, I’m going to show you the best free current accounts for new customers from several leading banks. Then I’ll outline any good exclusive products on offer to customers who open those accounts.
Tied products I’ll review include savings, mortgages, loans and credit cards. Banks offer other tied products such as pensions and investments, travel money, and financial advice, but I'm yet to see evidence of a bank offering anything close to the best prices, service, and terms and conditions in those areas.
Pay attention for a second: I have only included products linked to free bank accounts that I deem to be good products which are significantly better for your wallet than the same bank's non-exclusive products. These are the products that potentially make the bank worth switching current accounts for. Bearing that in mind, please let me know in comments below if you think I've missed any suitable products.
Barclays
Barclays bank account pays no interest. Here are its exclusive offers to current-account customers:
8.9% APR on a loan of £5,000 to £25,000.
Barclays doesn't specify, but it says it offers existing customers better Barclaycard deals.
First Direct
The First Direct 1st Account gives you a £100 introductory bonus, although it pays no interest. However, First Direct is also renowned for its excellent customer service, and if you’re not happy within 12 months, you’ll receive another £100 to leave.
0% on balance transfers for 15 months with a 3% fee.
Regular Saver Account (preferential rate)
8% fixed on monthly savings of £25-£250 for one year.
2.5% fixed for 16 months with this easy-access tax-free savings account.
7.5% APR on loans of £7,000-£15,000.
Halifax/Bank of Scotland
Both banks are part of the Lloyds Banking Group and offer many identical products, including its Reward Current Account, which pays you £5 each month you pay £1,000 into the account, or £60 per year.
0% on purchases for 12 months.
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Rewards Clarity Credit Card (Halifax only)
£5 cashback each month that you spend £300 or more. (That's 1% cashback if you average £500 per month and never spend less than £300 on your card.) No fee to use the card anywhere in the world.
Currently pays 3% interest. Rate drops after first year.
Personal Loan (Halifax only)
8.8% APR on loans of £7,000-£15,000.
Mortgage range (Halifax only)
0.2% off all introductory offers, e.g. a five-year fixed deal is reduced to 5.15% and a two-year tracker down to 3.04%. Both are 75% LTV with a £500 fee. This may save you about £200 compared to other Halifax borrowers in your first year, assuming an average mortgage debt of £100,000.
HSBC
The HSBC current account pays no interest.
0% on balance transfers for 15 months with a 3% fee.
Regular Saver (preferential rate)
8% on monthly savings of £25-£250 for one year.
7.5% APR on loans of £7,000 to £15,000.
Lloyds Bank
The Classic Account with Vantage currently pays 2% interest (or up to 4% on high balances). That's £20 over the year, assuming your account balance averages £1,000. (I'll make that assumption throughout my article.)
Lloyds specifies no products linked to its top free current account.
Royal Bank of Scotland
The Standard Current Account pays no interest. Here are RBS's linked products:
0% on balance transfers for 13 months with a 3% fee, and 0% on purchases for 13 months.
Santander
The Preferred In-Credit Current Account pays a £100 introductory bonus and 5% interest for 12 months. That's £50. (Note that this account will be pulled in coming weeks – find out more in Santander to penalise disloyal customers.)
Here are the linked products:
No foreign exchange fees. 0% for six months on balance transfers and purchases, with no fees.
Related how-to guide
Build up your savings
Here's how to get into the savings habit, find forgotten money, work out the real value of a savings rate and build up that emergency savings pot.
See the guideOne-year Tracker Savings Account
Tracks the base rate plus 2.65% for one year. Currently paying 3.15%. Minimum balance £10,000.
This tax-free savings account pays 2.5% above the base rate for one year. Guaranteed minimum rate of 3%.
£500 off the £1,000 arrangement fee for its two-year fixed-rate mortgage. With a 70% loan-to-value, buyers and movers get 3.15% and re-mortgagers 3.29%. Re-mortgagers can also get 3.49% and a £500 fee with a 75% LTV.
Read the small print
I don't have space for all the special conditions; for example, although the credit cards mentioned are exclusive to existing current account customers, you can't already have a credit card with the same bank, or usually the same banking group. So make sure you check the small print carefully.
Review
On the loans front, First Direct and HSBC current account customers do well with 7.5% APR. For comparison, the top personal loans available to all are 7.2% with Sainsbury's Finance and Alliance & Leicester, and 7.3% with Nationwide and Santander.
Some of the credit-card deals are particularly good. While we can get balance-transfer deals of 16 or 17 months from some providers with no strings, the Halifax and Santander cards are a great way to cut the cost of foreign money, provided you pay off your bills swiftly. The tied Halifax, Bank of Scotland and Santander credit cards also do unique deals on cashback and/or balance transfers and purchases.
Those putting aside money each month in savings will find it hard to do better than 4%, unless you're with HSBC or First Direct, because their linked regular saver accounts pay double that. All the other savings products mentioned above are pretty much top of the table, especially when you consider the guarantees attached.
While the tied mortgage deals are pretty good, you're likely to find significantly better deals by shopping around. That said, it's always worth calling up your own bank to see if it's willing to beat your best offer.
The winner is... Halifax!
So overall, the winner of the bank with the most good products to reward our loyalty is Halifax.
However, that's an arbitrary way to measure it. The bank that suits you best will depend on whether you most want a mortgage, loan, credit card for purchases, transfers or overseas use, or extra savings options.
More: Compare credit cards | Get the lowest loan rate now | Five ways the typical APR misleads us
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