Nationwide has confirmed how its £370 switching scheme works, with the deal available to new customers who open a FlexDirect account and use the Current Account Switch Service to switch within 28 days.
To qualify, customers must pay in at least £1,000, switch from an account with two direct debits, and make one eligible debit card payment within 31 days of opening the account.
How the £370 total is built up
Customers receive a £175 switching incentive and can earn another £120 from direct debit and debit card cashbacks in the first year. Nationwide is also giving customers 5% interest on balances up to £1,500 for the first 12 months on its fee-free account, which would give another £75 to bring the total to £370.
Several major UK banks are currently offering £200 or more to consumers to switch their current accounts, along with higher interest savings rates, and it has never been easier to move accounts.
Consumer rights expert's view on switching
“Loyalty doesn’t pay, and firms rely on your inertia,” agrees Scott Dixon, an Edinburgh-based consumer rights champion known as The Complaints Resolver.
But as with everything, there’s often a price to pay if you switch. “Everybody wants a frictionless banking experience,” says Dixon. “But you need to ask yourself – is a new bank going to make life easier for me?”
Why people stay loyal and what to consider
“Often it’s not so much loyalty, but is more about ‘better the devil you know’,” says Dixon. “We all lead busy lives, and our bank account just ticks along in the background.”
Dixon admits he has been with HSBC since 2009 but knows his branch manager, and if anything goes wrong, he can speak to somebody and get it sorted. “However, since Covid was treated by banks as a once-in-a-lifetime opportunity to decimate the branch network, forcing everybody to go online, it’s created a multitude of problems for many people.”
“The biggest benefit of switching is the cash bonus,” says Dixon. “NatWest are currently doing a £200 switch offer, but you can look for the best current deals on Uswitch or MoneySuperMarket. People should look at the headline perks and bonuses, and better interest rates, and cash-back and discounts, and customer service is also something to consider.”
He warns, “It’s easy to get seduced by offers – but make sure that you read the T&Cs to see if you’re eligible before applying and having that credit search logged on your credit file. Some restrictions include things like minimum monthly credits, like your salary or £1k-1.5k a month being paid into the account.”
How easy is switching and are there drawbacks?
The Current Account Switch Service (CASS) moves money, direct debits and standing orders across and closes the old account in seven working days. “Moving bank accounts is very easy to do now,” says Dixon. “You get in touch with your new bank and they just do everything in one go.”
If you switch frequently and need to apply for a mortgage, loan or car finance, credit searches are recorded and frequent searches can work against you. Dixon explains, “There are two types of searches – a soft search (which is what Buy Now Pay Later has been doing until recently) and hard searches for products such as mortgages and car loans. The problem is you don’t know which one will be carried out. I would take the view that a hard search will be carried out and if you clock up too many searches in a short period of time, it can affect your credit score.”
Some people use ‘burner accounts’ to switch regularly to benefit from the cash, but Dixon says, “It’s a lot of ‘faff’, and potentially could cost you time and money monitoring two different accounts with direct debits.”
Other perks and savings rates
On top of cash bonuses, some banks offer ongoing 1-2% cashback on spending or household bills, or retail vouchers. “One of the best perks is travel insurance,” says Dixon. “But you’ve got to treat it like a proper insurance policy. When it comes to making claims on bank account travel insurance, declaring pre-existing health conditions is a big problem and consumers are coming unstuck.”
Dixon says customer service is an unspoken benefit of switching. “We’re increasingly looking for bank accounts that provide better service. Some banks are better than others – Nationwide, Monzo and First Direct are rated highly.”
Some high street banks are also offering as much as 8% on savings – but these deals are not for long-term lump sum savers. Dixon explains, “If you take out a savings account that sits side by side with the current account, that’s where you’ll find the higher savings interest rates. But you need to watch out for banks reducing the introductory interest rate after a length of time.”
Many also charge a monthly maintenance fee that could wipe any interest earned, and usually come with a 12-month rate cliff. They require a monthly deposit of £150-£250 and the headline interest rate is only earned on the rolling amount, so the 8% rate is only bagged in the final month.
