UPDATED - 1st February 2017
Warning: long post ahead with lots of information. Any questions then please ask and I’ll do my best to answer.
So, this money making idea is based on the recent boom of current accounts offering ‘switching incentives’. Some banks offer money, others offer gift cards. It’s time to play them at their own game by gaining the incentive and then moving on to the next one. Currently, there are 9 banks offering these offers:
1. Yorkshire/Clydesdale Bank - no incentive at this moment in time.
2. Co-Op Bank - £110 incentive.
3. M&S Bank - up to £170 in gift cards. £50 M&S gift card if you open their fee-free current account and an ongoing £5/month for 24 months.
4. First Direct - £125 if you open a 1st Current Account (via MSE link) and an extra £100 if you leave them.
5. Halifax - £100 if you open their Halifax Reward Current Account and then an ongoing £3/month reward.
6. TSB - £125 for their Classic Plus account plus up to £5/month cashback (via MSE link).
7. HSBC - £150 if you open their Advance account plus an extra £50 after 12 months.
8. Nationwide - £100 if you're referred by an existing Nationwide customer.
9. Some people reporting that they're receiving an offer for switching current accounts to Tesco Bank - 10,000 clubcard points, 5,000 clubcard points, £100 Tesco gift card or £50 Tesco gift card. Seems to be people who have a Tesco credit card and/or Tesco savings account but no Tesco Bank current account. *Check all emails and mail through your letterbox*
More information about all these offers and clickable links in the 1st comment below.
Now, it’s important to note that these offers have some simple T&Cs that you must adhere to in order to get the incentives. For example, First Direct ask that you pay in £1000 before you get the incentive, Co-Op requires 4 x Direct Debits (DDs) to be transferred over plus £800 to be paid in and Halifax ask you to transfer 2 x active DDs and pay in £750 to get the £5/month; you DO NOT have to do this for the £100 switch incentive. M&S state that you must use their switching service to receive the incentive.
There are some important points to mention before I go ahead:
- to do the above, you DO NOT have to close your usual current account where you pay for your gas, electricity, water, phone, council tax bills etc. or where your salary is paid into. The idea is to create a ‘donor’ current account and use that account for the switching process; more information on this later.
- if you are on the electoral register, you will find that opening these accounts is A LOT easier. You can apply online/via phone for all of them and you can get an instant decision (in most cases) and access to your current accounts via online or telephone banking.
- there is MINIMAL hassle when switching current accounts. Banks are now able to switch your current account within 7 working days and they will do all the work. That means they will arrange all DDs and SOs to be transferred over, they will arrange for the closure of your old account and they will transfer over any remaining balance.
- this is NOT a time consuming commitment; all you need is a little bit of organisation. Opening a current account takes 10 minutes, making a phone call to switch current accounts takes 10 minutes, setting up a new payment and transferring £750/£800/£1000 into your new current account to fulfil the T&Cs takes 5 minutes (not applicable for M&S) and transferring that money out takes another 5 minutes. Finally, expect to check your account every few days which will add another 10 minutes or so. Each account should not take any longer than a couple of hours from start to finish.
- each time you open a current account, the bank will do a credit search and this MAY have an impact on your credit score (especially if you have too many searches within a short period of time). Consider any upcoming mortgage, credit card and loan applications and whether it’s a good idea to open these current accounts. You can get your credit report for free from Noddle. To date, my credit score has not been affected. Where possible, don’t apply for an overdraft and space out your applications to minimise the impact on your credit score. As long as you keep an eye on your score every month or so and spread your applications then you should not have any problems.
- First Direct and M&S occasionally offer increased switching rates of £125 via MSE. Keep an eye out for those offers.
- incentives are per customer and NOT per household.
- this is not going make you a millionaire overnight, but it certainly will allow you to earn a few hundred pounds over a few months with little effort.
- by switching current accounts, the banks currently CANNOT ask for your switching incentive back.
Now, on to the instructions:
1. Open a ‘donor’ account. Barclays, Halifax and Natwest have simple online current account applications. Once your account is open, stick £1+ in it. Wait for your debit card to arrive.
2. Open a current account with any of the banks offering a switch incentive. Read the T&Cs, funding requirements (if applicable) etc. Initiate the switch by giving the bank your ‘donor’ account details. Wait to receive the switching incentive. Once received, move on to the next bank (you won't have to repeat step 1 as you've now got a ‘donor’ account with the bank you just switched to).
3. Continue until you're fed up/have taken advantage of the offers. And that’s it!
So there you have it folks, a nice little earner.
Any questions then fire away; always here to help.
**A big thank you to everyone who comments when new incentives pop up, change etc.**