World Economy

UK Current Account Market Hotting Up

UK Current Account Market Hotting UpUK Current Account Market Hotting Up

Cashback, “golden hello” payments of up to £150 ($227.5), and generous rates of interest are among the latest carrots being dangled in front of bank customers in an attempt to persuade them to switch current accounts.

This week, TSB launched a cashback deal on its most popular current account that allows people to earn up to £60 a year from their contactless card payments. Meanwhile, as of Tuesday this week you can pocket £150 if you move to First Direct’s main current account. Nationwide and Halifax are among the other high street names trying to persuade people to take their cash, Yahoo News reported.

It all indicates that competition in the current account market is hotting up; according to MoneySuperMarket, providers are “increasingly looking to offer bigger and better incentives”.

But despite these tempting offers, and the introduction of the free-to-use “current account switch service”, several surveys have indicated that more than half of all customers have been with the same bank for more than 10 years.

Rounding up the latest offers:

• TSB is giving its Classic Plus account holders 5% cashback on the first £100 of contactless purchases made each month using their debit card.

TSB relaunched two years ago after being spun off by its parent company Lloyds, and was taken over by Spanish banking group Sabadell this year. It launched Classic Plus, which has no monthly fee, in March 2014 and since then more than 380,000 accounts have been opened.

• First Direct will give people £125 if they switch to its current account, which is called 1st Account. Currently, if you apply through MoneySuperMarket you will receive £150. You need to use the official current account switch service and pay in at least £1,000 within three months of opening the account.

• Nationwide has a deal where, if you recommend a friend or family member, you get £200 to share.

You can recommend as many friends as you like, and they will each receive £100, but Nationwide will only pay you a maximum of £1,000 in any 12-month period.

• Halifax will pay you £100 if you switch to its fee-free Reward current account. Plus, you get a £5 “reward” payment each month that you pay £750 or more into your account, pay out two different direct debits and stay in credit. This payment is net of income tax–the gross amount is £6.25.

• Yorkshire Bank and Clydesdale Bank are each offering £150 if you switch your main bank account over to them. Again, you must use the official switching scheme, and pay in at least £1,000 a month and maintain a minimum of two active direct debits.