Is bank account switching back? Here’s what to consider before diving in

Current account switching was until recently a lucrative pursuit which could reward dedicated switchers with hundreds of pounds a year.

But in recent times, and especially during the pandemic, the offers available have collapsed.

That now seems to be changing though as high street banks up the stakes to attract new customers. But anyone thinking about switching their current account should consider a few things first. Some of the best deals, we will caveat, come from providers with the biggest customer loss rates. For example, according to data from the Current Account Switching Service (CASS) owner, between April and June this year HSBC lost 26,743 customers.

In August HSBC also had the best current account switch deal on the market, with £140 to move your banking to it. That deal has now unfortunately closed, but will most likely be back when executives at the bank feel they need to ‘up’ customer numbers again.

The lesson here before making the switch based on a monetary reward, is to ask yourself why so many customers are leaving the bank. HSBC’s net losses were only -2,851 as the provider used switching incentives to gain new customers too. But the biggest net losers were Santander (-10,965), NatWest (-10,605) and TSB (-8,502).

HSBC’s switching offer is masking a bigger picture where many dissatisfied customers are leaving the bank for greener pastures. Before you dive into a new current account then, it is worth keeping these stats in mind – you might be getting a freebie, but you may soon tire of the service from your new provider.

Deals come and go frequently, as mentioned with the above HSBC deal which didn’t last long, so it is worth keeping an eye out if you are keen to get a switching reward.

At the time of writing there are two switching deals on the market.

  1. Nationwide

Nationwide currently has the only cash offer on the market, with £100 to switch if you’re not a customer. If you are a customer, for instance with a mortgage or a savings product with the Building Society, then you can get £125 for switching your current account.

To qualify for the reward you must complete a switch via the Current Account Switching Service (CASS) and pay out at least two direct debits from the new account.

The account also comes with 2% fixed interest on deposits up to £1,500 for the first 12 months you hold it.

  1. Virgin Money

Virgin Money isn’t offering a direct cash reward, but it is offering a £150 voucher for Virgin Experience Days. It is however a little complicated to obtain the reward.

You must apply for the account online then switch from your current provider within 45 days including at least two direct debits. Once this is done you’ll need to download and register the mobile banking app for Virgin Money and add £1,000 to the linked savings account.

You’ll need to keep the deposit there until your voucher arrives. The account pays 2.02% interest on balances up to £1,000.