When Santander changed the interest rate on the 123 Account last year, I looked into changing my Current Account right away. Why wouldn’t I? The best thing about it was its interest rate offering on my household bills and having the cashback capped at £5 per category, I was certain I could earn more by switching. And I was right! Well, there were more offers when I switched as it was pre-pandemic, but there are still some good deals!
In this article, I will show the top bank switching offers and referral deals that I have found as of 01st January 2021 as well as outlining the steps to take should you decide to switch.
While searching and choosing a bank that offers the best deal for switching, you should fully research the account and bank itself. Be sure to consider any short-term gains (e.g. cashback) to your long-term needs (e.g. interest rate, overdraft rates). With that in mind, here are the best offers:
Best Bank Account Switch & Referral Offers
Virgin Money
If you are an avid wine drinker, you may enjoy this offer. Virgin Money is currently offering £180 worth of wine free when you open an account with them. Even if you are not a wine drinker, you can switch and sell them on or even offer them as gifts.
What you need to do to receive this offer is switch using their Switch Service, download the VirginMoney App, transfer two direct debits and add at least £1,000 to one of their Instant Access Savings accounts. You can also receive up to £225 off their Virgin Media bundles if you are a new customer.
TSB Spend & Save
The newly offered Spend & Save account from TSB gives you £5 cashback for the first six months of opening the account – that is an extra £30 for nothing. The only criteria to receive this offer is you need to use the debit card 30 times or more in a month.
The Spend & Save account also offers a “Save The Pennies” function that rounds up every debit card payment to the nearest pound. These extra pennies then go into a savings account!
Think Money Quidco Offer
Quidco is currently running a promotion with Think Money Bank where you receive £32 cashback when you open a current account. This account is designed for those who are typically poor at budget management or have bad credit, where they have a cool feature that separates your money into two pots: One for your bills, another for your spending.
Triodos Share For Good
If you are an existing customer of Triodos Bank and you refer someone, they will donate £25 to your chosen charity and will send a £60 voucher to the new customer. This is through their Share For Good offer. The existing customer must be of age above 18 years and have a savings account, current account, investment ISA or cash ISA, and the new customer must open a current account.
First Direct
First Direct bank has a different strategy to most in that they will pay you £100 if you decide to leave the Bank, where others pay you to switch to them. It should be noted that First Direct is always ranked high for its customer service and they are banking on that to keep your business.
To take advantage of this offer, you need to play the long game as you must bank with them for at least six months and need to have paid at least £1000 per month for each of those. Along with that, it is also necessary for you by using its current account switch service. If you start to get cold feet and want to switch and get that £100, you need to let them know within the first 12 months of opening the account.
How to change bank accounts
1. Choose a bank
Naturally, the first step for switching your bank account is to choose a bank where you want to open a new account. Review all the features offered by your chosen bank, such as interest rates, fees, overdraft rates, and customer reviews. I always like to check the customer reviews, not just for the features, but the customer services.
2. Ask about the bank account switching resources.
To ensure smooth sailing when you switch, check if the bank offers a Current Account switch service. You will find most banks offer this service, but some smaller/ challenger banks do not. It takes the hassle and processes of transferring the money, payments, direct debits, etc, from your old account to the new as well as notifying your old bank to close the account.
3. Open your new bank account.
The next step is to open your new account. Opening an account is not a lengthy task where you can quickly complete the procedure online within 10 minutes or less. The switch typically takes seven to ten days.
4. Redirect your income
After your account is up and running, you should reach out to the HR/ finance department and let them know about the change and to update your PAYE details. No one wants their money being paid somewhere else, so be sure to do this as banks will stop redirecting the money after a certain period and it just won’t go through.
5. Update subscription payment details
I have switched my bank account a couple of times now, and I have found that all main Direct Debits (Phone contract, broadband, council tax, etc.) were updated with the switch resource, however, my subscriptions were not. These subscriptions included the likes of Netflix, Spotify, and Amazon Prime and these do not get switched as they are a recurring card payment.
Should your new bank not offer a switch resource, you will also need to:
5. Update any existing direct debits
Should your bank not offer a switching service, you will need to reach out to all of the companies/ services you have direct debits with. Inform them of the change, when the switch is due to happen, and the new details.
6. Keep your old account open for a while
Do not be too quick to close your old account as it may take some time to update the automatic billing and Direct Debit instructions. Transfer all the money to the new account but keep just enough to cover any direct debits and wait for a month or two to ensure all details have been updated.
7. Empty and close the old account
The final step is to transfer all the funds in the old account and close it. You should provide formal instruction to the old bank before you close it to ensure you do not have any unexpected interest due, any remaining fees, and to stop being sent statements.
I hope this article helps in your switching journey!
James Banerjee is an Account Director who graduated from the University of Kent in 2014. He works in SEO on clients such as HSBC UK and Nestle and he has a keen interest in personal finances and money-saving advice.
