Why it's probably not worth
changing your bank account for £100
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Last update : July 2010
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| Firstly, here's a list of banks that has in the past agreed to pay new customers a cash bonus if they move their present current account.
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A & L Premier Current Account
- No monthly fee but you must pay in a minimum of £500 a month
- Free annual multi-trip European travel insurance worth up to £60 (upper age limit of 65 applies)
- 0% overdraft for the first 12 months
- The switching process is helped by a dedicated switching service
- Full internet banking - See also - How to be safe when internet banking
- Website and more details
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First Direct
- Pays a £100 cash bounty to switch but you need to deposit a minimum of £1,500 for 3 months to qualify or have a minimum of £1,500 deposited at all times
- 0% overdraft limit of £250
- Full internet banking and telephone support
- The bank will also pay you £100 if you don't like them and want to leave after 6 months (my advice - check the smallprint)
- Website and more details
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| Switching a bank account is now easy |
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The good news is that it's now easy to move a current account from one bank to a different one. The banks now have systems to automatically handle the process including automatically transferring any standing orders and direct debits.
I have done this myself on a minor account and the process was flawless. However, it's dangerous to assume there won't be any problems so it's a good idea to do the following -
a) Keep your old account open for a few months after you've changed accounts to make sure no money is being paid in or out
b) For the first 6 weeks make sure the direct debits and standing orders are being properly paid from the new account
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| The second point is extremely important because if there's a problem which you don't spot within a week there's a chance your credit file will be negatively affected. What happens for example - |
- If your old account is set up to automatically pay the minimum amount on your monthly Barclaycard statement
- But the payment from your new bank account either doesn't go through (perhaps it was never sent or there was a wrong payee reference number)
- Barclaycard might slap a late payment charge on the account (a minor problem) but mark your credit file with a late payment entry (potentially a major problem)
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A late payment mark on your credit file used to be a minor problem. But recently there have been many reports of people being refused a credit card/best buy mortgage or loan who have just a single late payment entry on their credit file.
So as I said above, if you change your bank account keep a close tab on whether everything is working correctly and all bills are being paid correctly. The good news though is that keeping a close eye on your bank account is simple with internet banking.
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| Is it worth switching your bank account |
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Everyone likes a free £100 but is that enough to consider switching an account? Probably not unless your present bank is annoying you. If that was the case I'd switch but if I'm happy with my present account I don't think £100 is enough.
For example, Natwest has been my main bank for the last 7-8 years. I've had no problems with them, I know how to work their internet banking, and am always impressed with their telephone service (they pick up within 20 seconds and are polite and professional).
Summary - It's only worth moving your bank account if you're currently having problems, then the £100 cash bounty is a nice bonus. Otherwise, I don't think it's worth it.
Plus, secret number 9 - Prioritise your personal finance - be good, not perfect - which is one of this site's 10 Secrets to Good Personal Finance suggests we've all got a life to live rather than worrying about every pound and pence.
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Postscript - Watch the small print
Thanks to reader Sarah M. who emailed in saying 'watch the small print'. She transferred her bank account to get hold of a £100 cash bounty but was refused the money after 14 days.
When she complained she was told that people only qualify if they also transfer their Direct Debits. But she didn't have any and wasn't made aware of this by the person who signed her up in the Bank.
Typical behaviour from the banks. Just proves how important it is to look for any catches and small print tricks.
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