Your survival guide to bank account switching deals

Gone are the days of the basic bank switching deal, where you could simply switch accounts and bag yourself £200. These days, not only are the cash offers typically lower, but banks have added a whole bunch of extra eligibility criteria – from x-amount of card transactions, direct debits or cash deposits per month to giving up your first-born child.

All is not lost, however, with more current accounts now offering the chance to earn extra money in the form of cashback and good interest on savings when you switch, as long as you jump through the hoops. So to help max your money and keep your sanity in the process, here’s our survival guide to bagging the best bank switching deals.

“Free money” – if you spend money

It can be tempting to see these switching deals as free money. But more often, you gotta spend money to make money. As part of their switch eligibility criteria, TSB, first direct and Co-op all require you to make between 5 and 20 card payments within a specific timeframe to get some or all of the cash.

TSB’s £160 switching deal is technically a £100 switching deal, with the chance to earn up to £60 in cashback over 6 months. As part of the many hoops on your way to getting the first £100 and the remaining £60, you need to make at least 20 debit card payments a month over 6 months. If each card payment is just £1, you’d be spending £120 to get this switching deal.

Of course, if you’re using this account’s debit card for your regular everyday spending then that £160 might still feel like free money on top. But it’s certainly more of a spending commitment than the “good old days” where you could typically just switch and cash in.

Another cost to consider are account fees. Santander’s £175 switching deal requires you to switch to a Santander Edge or Edge Up account which come with monthly fees of £3 and £5, respectively. Over a year, the Santander Edge account will set you back £36. Subtract this fee from your switching deal and you’re only making £139. Finder’s full analysis of what you can make with this deal accounts for these fees.

Up to 12 months of small print

To stop people switching accounts every other Friday, some banks have drawn out the time commitment to get your cash. And, they’re doing this in several ways.

The first is by having ongoing hoops to jump through to get the money. With Co-op’s £150 offer, you get £75 for the initial switch, then the remaining £75 in £15 instalments over 5 months – if you continue to meet the eligibility criteria. TSB’s offer requires a 6-month commitment to bag the extra £60 cashback.

The second is through dangling additional rewards. With the Santander £175 switch offer, you get access to a Regular Saver with 7% AER on balances up to £4K, which could earn you up to an extra £280. That 7% is a 12-month fixed rate, however, so you’d need to keep your savings in that account for a whole year to get the full £280. A big draw of the TSB account is access to its Partnership Reward programme, which opens the door to extra rewards like cinema tickets, hotel stays and TV streaming packages – again, as long as you meet the eligibility criteria and stick around until January 2025.

It’s great to see banks offering these extra rewards and high interest rates for customers. But it’s worth checking the T&Cs in advance to make sure you’re willing to go the distance to get the full package.

High interest instead of cash

Virgin Money has taken the long-term switch to the next level, doing away with the cash lump sum in exchange for a 10.47% AER interest rate on your first £1,000 for 12 months, when you switch to a M, M Plus or Club M account (and meet the various T&Cs, as per).

With any switch deal, it’s important to weigh up whether the cash or the commitment is more valuable to you – and, crucially, do the maths to see which one will bring home the most bacon! The Virgin Money deal, for example, will get you only an extra £110 a year in interest, and you’ll have to pay a £12.50 monthly fee with the Club M account.

Is it the right account for you?

If you’re potentially making a year-long commitment to a new current account, you’ll want to make sure it’s the right account for you. Consider any account fees. Both Santander and Lloyds require you to switch to a paid-for current account, with fees ranging from £3 to £12.50 a month. Typically, when you pay a fee you should expect extra rewards and features on the account – for example, 12 months Disney+ with a Club Lloyds account. But make sure this is a cost you’re willing to pay before switching.

Think about any additional accounts you get access to, like a Regular Saver, for example. If saving is a priority for you, consider switching to an account with a high interest rate on offer. Santander’s is offering 7% AER on balances up to £4K on its Regular Saver, and first direct is offering 7% AER on balances up to £300 a month in its Regular Saver.

And, do you actually like the bank you’re switching to? Do you like the look of the banking app or platform? Is it easy to use? Or, on a deeper level. Co-op, for example, prides itself on supporting “the planet, people and community”.

About the author

Louise Bastock is an editor at Finder, specialising in a range of personal finance topics, from financial wellness to first-time buyers. As video manager, she’s also responsible for presenting and producing the UK’s video content across multiple channels, including YouTube, TikTok and Instagram.

This article originally appeared on finder.com/uk and was syndicated by MediaFeed.org.