SWITCHING bank accounts has historically been an easy way to pocket free cash.
Banks regularly offer incentives worth hundreds of pounds for new customers to switch to them for a certain period of time, and four deals are live right now.
The offers have hugely boosted switching rates.
But savvy Brits are being warned to check the terms and conditions before taking up a current account switching offer, as in some cases, the requirements to claim the cash are quite stringent.
It’s impossible to know if everyone who applies has got the bonus, as banks don’t publish these figures.
But experts have warned that thousands risk missing out if they fail to meet the eligibility criteria.
Currently, three major banks are offering new current account customers free cash worth up to £200.
First Direct and Lloyds Bank are offering newbies £175 to switch, while The Co-operative Bank is offering new customers £150 – a deal which ends today.
However, grabbing the cash isn’t as easy as it was in the past. There are often a number of hoops to jump through before you can claim the cash.
Martyn James, a consumer rights expert, explained: “It’s so easy to be blinded by big cash offers for switching or impressive interest rates.
“But the better the offer, the more catches there are.
“Fail to tick all the boxes, and thousands of people will miss out on the free cash.
“So make sure you check all of the T&Cs before you switch so you can find the best deal – and don’t get caught short.”
And Alastair Douglas, chief executive of Totally Money, said the eligibility requirements for bank switching deals are becoming “increasingly complicated.”
However, he added: “Loyalty doesn’t pay, but switching can and there’s some great offers on the market.
“Just make sure you do the research so you know exactly what’s needed to claim the full bonus.”
Our experts have shared the five most common loopholes that could stop you getting the free cash and how to navigate them.
1. NOT MEETING MINIMUM PAYMENTS
Some accounts require you to pay a minimum amount of money into the account each month, Mr James explained.
For example, newbies wishing to take up Lloyds Bank’s offer of £175 to switch to a Club Lloyds account must pay in a hefty sum of at least £2,000 a month.
Failure to pay this much in could mean you forfeit the cash bonus.
However, there are always ways you can trick the system and get around this rule.
For example, if your wages wouldn’t cover the minimum pay in amounts, you could temporarily shift the equivalent you have in a separate account or savings account into the new current account.
Do that once a month, and the bank will still count you as eligible for its bonus.
2. NOT PAYING YOUR BILLS
Another increasingly frustrating requirement for claiming free switching cash is that you must generally set up at least two direct debits from your new account.
Fail to do this and you won’t get the free cash.
For example, anyone switching to First Direct’s account must set up at least two active direct debits within 30 days of initiating the switch in order to qualify for the £175 bonus.
Those wishing to bag the offer from The Co-operative Bank and must also set up two direct debits.
Lloyds Bank asks for three.
3. NOT COVERING THE FEES
Mr James has warned potential switchers to always check for hidden account fees, too.
If you don’t pay in the right amount or follow certain rules for your account, you might have to pay a monthly fee just to keep it open – and you won’t get the bonus.
For example, customers taking up Lloyds Bank’s offer of £175 to switch to a Club Lloyds account will be charged a £3 monthly fee just to keep the account open if they don’t pay £2,000 in a month.
If you do get the bonus but then stop paying in the minimum amount and start paying account fees, these could eat away at any bonus you got, too.
“Have a look at those comparison tables, because some firms charge fees or apply penalties if you don’t meet the minimum requirements,” Mr James said.
“You may even get your account downgraded.”
LLOYDS BANK – GRAB £175
LLOYDS is offering switchers £175 if they move across to one of three of its current accounts: Club Lloyds, Club Lloyds Silver or Club Lloyds Platinum.
You just have to open an account online, by phone or in-branch, then switch in an account from a different bank including three direct debits by July 30.
The £175 will then be paid within 10 working days of the switch starting.
You can’t have had a switching cash bonus from Lloyds, Bank of Scotland or Halifax since April 2020.
As well as the up front £175 cash, people switching to Lloyds can pick up a host of additional perks including free cinema tickets and a Disney+ subscription.
All three qualifying current accounts come with a monthly fee worth up to £21 which is waived when you pay in £2,000 or more each month.
4. CHECK YOUR HISTORY
Before you commit to switching bank accounts, dig out your old files and triple-check to see if you’ve had a current account with the same provider before, as this could make you ineligible for the deal.
Banks usually offer free money out to tempt new customers in, but old or existing customers can’t usually benefit.
For example, First Direct’s current free cash offer is only open to those who haven’t had any financial product with the firm before or who haven’t held an account with its sister bank, HSBC, since January 2018.
Andrew Hagger, founder of MoneyComms, explained: “Some banks won’t pay out if you’ve switched previously.
“And in some cases, this can go back as far as the last five or six years.”
5. USE THE CASS
In almost every case, to qualify for free cash you’ll need to use the Current Account Switching Service (CASS).
All you have to do is apply for the new account you want, and the new bank will tell your existing one you’re moving.
There are a few things you can do before switching, though, including choosing your switch date and transferring any old bank statements to your new account – so don’t rush.
You don’t have to remember to move direct debits across when moving, as this is done for you.
Mr Douglas said: “The Current Account Switch Service works with more than 50 banks and building societies, and 99% of switches are completed within seven days.”
THE CO-OPERATIVE BANK – GRAB £150
THE Co-operative Bank is offering new customers free cash worth up to £150.
The offer includes £75 paid up front for the switch, then a further £15 per month for five months to anyone who also opens a Regular Saver account – worth another £75.
Anyone who makes the switch will be credited the £75 free cash within seven days of meeting all the qualifying criteria.
The criteria includes opening a Co-operative Bank Standard Current Account or Everyday Extra account.
Then within 30 days of switching you have to set up two direct debits, deposit a minimum of £1,000 and register for online or mobile banking.
You also have to make a minimum 10 card transactions in the first 30 days of the switch.
You won’t qualify if you have switched to the Co-operative Bank since November 1, 2022.
To qualify for the additional £75 paid over five months, you have to have received the £75 initial up front cash payment.
You then have to open a Regular Saver account before the last day of the same month you receive the £75 cash switching incentive.
You also have to deposit £50 into the savers account in the same month you receive the £75 switching incentive.
That means if you receive the £75 switching bonus in July, you have to have completed the two actions above before the end of July.
Applications for this offer end on Friday, July 5.
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