Nearly 1 million people switched checking accounts last year as banks competed for the best benefits, cashback and bonuses.
In 2022 there were 985,000 switchers, an increase of 20 percent compared to last year.
This is stated by the Payment Service Switch – the organization that has been making it easier for people to switch banks since 2013.
In total, more than 8.8 million people have now switched bank accounts since the launch of the service.
Nearly 1 million people switched current accounts last year, according to the Switching Service
The service saw the highest number of switches in its nearly ten-year history in the last three months of 2022, with 376,107 between October and December.
Jo Kenrick, Chair of Pay.UK Switching Services’ Client Committee, said: ‘We faced a unique set of challenges, including a third consecutive year of economic turmoil, so it is particularly humbling to have reached our highest quarterly volume on record. switches in the last quarter of 2022.
“We will continue to confidently support consumers as the UK’s payment account switching service as we enter our 10th anniversary year in 2023.”
For those still considering a switch, banks continue to offer cash bonuses of up to £200, as well as interest on credit, cashback and other benefits. We’ve collected some of the best incentives below.
Best bank account exchange offers right now
Best for Cash Bonuses:
A number of banks offer free cash to switch. First Direct pays £175, while NatWest and RBS offer £200.
First Direct offers Switchers a £175 bonus when they deposit £1,000 within three months of opening the account.
NatWest and RBS are offering their biggest ever bank account switch incentive, with new and existing customers receiving £200.
Anyone who switches their main account to the NatWest or RBS Reward or Select account is eligible if they log into mobile banking and pay at least £1,250.
Those going for the Rewards account should know that there is a £2 monthly fee associated with it.
However, they can also earn £4 monthly cashback for setting up two direct debits per month and £1 per month if they log into mobile banking each month.
Best Offer Ever: New and existing customers who switch their main checking account to NatWest will receive £200 within seven days of meeting eligibility criteria
Best for interest:
Nationwide offers an introductory credit rate on its FlexDirect checking account of 5 percent.
The special rate is available for new applications with a balance of up to £1,500 during the first 12 months.
It means that someone who keeps at least £1,500 in the account can earn £75 in interest over the course of a year.
To take advantage of the in-credit interest, holders must pay a minimum of £1,000 each month.
Anyone looking for a higher interest rate would also be wise to register with a bank that gives access to a best-paying exclusive savings interest.
HSBC’s Online Bonus Saver is an instant access deal that pays out 3.25 per cent on balances up to £10,000, exclusive to HSBC bank customers. Any cash held above the £10,000 limit will have the rate drop to 1.75 per cent.
The disadvantage is that the 3.25 percent rate only applies to the month in which no money is withdrawn. During a month in which a withdrawal is made or the account is closed, savers earn only 1.2 percent for that particular month.
HSBC’s Online Bonus Saver is an instant access deal that pays out 3.25 per cent on balances up to £10,000, exclusive to HSBC bank customers
Barclays bank customers who sign up for the Blue Rewards scheme can take advantage of an exclusive, easy-to-access savings agreement that pays more than 5 percent interest.
The Barclays Rainy Day Saver account pays 5.12 per cent on balances up to £5,000. That could add up to over £250 in interest after a year.
However, it’s worth pointing out that cash above the £5,000 limit will only yield 0.5 per cent.
The downside is that customers have to pay £5 per month to become a Blue Rewards member. However, that can be negated with the £5 monthly cashback for having two bank direct debits paid out.
Switchers should also consider digital banks, which offer some of the most accessible savings rates at a time when many of the major banks are paying substandard rates.
Monzo, for example, offers access to a linked instant savings account that pays 3.2 percent.
Read our review of the four best digital banks here.
Best for spending abroad for free
Many of the major banks charge transaction fees when using their debit card abroad.
For example, Lloyds and Barclays charge 2.99 percent, while NatWest and HSBC charge 2.75 percent. They also typically charge a cash withdrawal fee at ATMs.
Digital banks, Chase, Monzo, Starling, and Kroo all save their customers these sneaky fees.
However, only Monzo and Starling are currently part of the switching service, so those wanting to take advantage of the other two will need to do so as secondary accounts. They are both free accounts so this shouldn’t be a problem.
Smartphone banking: Digital banks, Chase, Kroo, Starling and Monzo all save their customers sneaky fees when using their debit card abroad
All four banks’ currency converters use Mastercard’s exchange rate and there are no additional transaction fees or surcharges.
Read more about the best foreign exchange debit cards here.
The best for cashback
Chase’s free checking account offers arguably the best cashback deal right now.
It offers 1 percent cashback on card spend over 12 months – capped at £15 per month.
This cashback offer is valid for one year as long as customers deposit a minimum of £500 per month into the account.
This means that for the first two years that you have a Chase account, it’s possible to accrue £180 a year in cashback.
Santander’s Edge account is also a good option, offering cashback on both debit card spending and direct debits, with up to £20 per month available, although there is a £3 monthly account fee.
Santander has unveiled Santander Edge, a new current account, offering up to £240 cashback every year
There is 1 percent cashback on essential groceries and transportation-based debit card expenses. This is capped at £10 per month.
There is an additional 1 percent cashback on household bills paid by direct debit for council tax, gas and electricity, mobile, fixed, broadband and paid TV packages. Again, this is capped at £10 per month.
To earn the £10 cashback in both categories, customers must spend £1,000 per month in each category. This can be a tall order for some.
The £3 monthly fee is unavoidable, so would-be switchers will need to bear this in mind as well.
To qualify for the Santander Edge checking account, customers must have a minimum of £500 credited to their account each month and at least two active direct debits.
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