Halifax is back on the current account switching offensive hoping to tempt new joiners with a cash bribe and a range of other perks.
From today, the bank is offering new customers £125 when they switch to its Halifax Reward Account.
Halifax has recently enjoyed the highest influx of switchers of any bank, gaining 16,684 more than it lost between April and June, according to the latest official figures.
Cash carrot: On top of a £125 cash bribe, Halifax is also offering customers monthly rewards such as cinema tickets or movie rentals
It is thought that its £100 cash incentive back in April might be largely responsible for the gains.
However, competition has ramped up over recent months with five other banks currently offering cash bribes to switchers, meaning Halifax may feel obliged to follow suit or face net customer losses over the final two months of 2021.
First Direct, NatWest, Nationwide, RBS and Santander are all offering new joiners cash incentives in excess of £100.
There is also considerable competition coming from challenger banks such as Starling Bank and Monzo who are attracting customers without having to offer cash perks.
Since 2018, Starling and Monzo have both recorded net customer gains of 137,000 and 124,000 respectively with Starling in particular having recorded net gains in excess of 10,000 every three months since the start of 2020.
Starling Bank has consistently secured net customer gains via the current account switching service despite not offering cash incentives.
Online and mobile banking offerings and better customer service are often cited as the main reasons behind people switching current accounts suggesting cash bribes can only do so much.
Andrew Hagger founder and director of MoneyComms said: ‘I think Halifax is fighting back against the App only banks such as Starling, Monzo and Chase – it probably feels that it needs to dangle a more appetizing carrot to tempt customers in.
‘I’m sure it saw how well the previous incentive worked earlier this year when it pulled so many new customers via CASS and it is probably looking to boost new customer numbers further.’
What is Halifax offering?
By using the Current Account Switching Service, the £125 bribe will be paid directly into new bank accounts within three days of the switch completing.
The offer is dependent on opening the account and starting the switch by 14 December.
On top of the £125 cash offer, switchers can pick their choice of one reward from a range of potential perks.
These include being able to stream two movies a month throughout the year said to be worth up to £120, a monthly cinema ticket, a choice of three digital magazine subscriptions or a £5 monthly cashback reward.
However, as usual there are some hoops that switchers need to jump through to fully benefit.
To qualify for the monthly rewards, you will need to pay £1,500 into the account each month, avoid dipping into overdraft, and either spend £500 on their debit card or maintain a balance of £5000 each month.
Failure to meet Halifax’s terms will mean switchers are hit with a £3 monthly fee, which will quickly eat into the £125 joining incentive.
For switchers seeking a more comprehensive package, Halifax’s Ultimate Reward Current Account also offers the £125 incentive as well as additional benefits such as AA breakdown cover, worldwide travel and mobile phone insurance, albeit with a £17 monthly fee.
How does it compare?
NatWest and RBS is offering £100 to new and existing customers who switch with an additional £50 injection for those who stay for a further nine months.
For NatWest’s deal, new and existing customers can apply to switch to a number of its accounts – the Select and Reward account being its most popular.
You will also need to pay in £1,500 into the account and log into mobile banking through the NatWest mobile app to qualify for the initial £100.
A further £50 is then on offer if 10 transactions either in or out of the account are made for nine consecutive months between 1 January and 30 September.
NatWest is currently offering new and existing customers £150 to switch and stay.
The Select account has no monthly fee, although for anyone intent on using their account, the Reward account will likely prove a more lucrative option.
Although the Reward account comes with a £2 monthly fee, you should still make a net gain of £3 each month.
This is because it pays £4 each month for setting up two monthly direct debits and an additional £1 each month for logging onto online banking.
NatWest Reward switchers will also gain access to a linked savings account paying up to 3 per cent interest on balances of £1,000, although you can only put in £50 each month.
Those who switch to First Direct’s 1st account will receive £130 when they switch using the Current Account Switching Service before 22 November, as long as they pay £1,000 into the account each month for the first three months.
It has no account fee and it also offers a £250 interest free buffer on overdrafts.
Santander is offering £130 cashback to both new and existing customers.
Santander is also offering £130 cashback to both new and existing customers when they switch to a 123 current account or 123 Lite account or to its Everyday, Select or Private Current Account.
The 123 Lite account has a £2 monthly charge but the 123 account comes with a £5 monthly fee.
To qualify for the cashback for either account, you will need to complete the switch within 60 days, set up two active direct debits and deposit at least £1,000.
The cashback will then be paid directly into your qualifying Santander account within 30 days.
Existing customers who have previously opened an account can still benefit from the cashback, if they complete a full switch from an account they hold elsewhere via the Current Account Switching Service.
To switch or not to switch?
On top of the cash bribes being offered by some of the big banks, there are other perks that could encourage switchers to move.
Customer service, mobile app’s, interest rates, overdraft limits, saving perks, a bank’s ESG credentials, and other niche lifestyle benefits are all factors that could count for something.
Since the service launched in 2013, the CASS has facilitated 7.6million account switches and successfully redirected more than 113.4million payments.
Of those who completed a switch using the CASS, 73 per cent say they prefer their new current account, with only 2 per cent stating that their new account was worse.
For customers fed up with poor service or a lack of perks at their existing bank – switching can be a great option.
But finding a current account that works best for you, may mean looking past headline grabbing cash incentives.
To help you decide, check out This is Money’s review of the best current account offerings available right now.
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