Bank account switching could be a great way to make some extra cash. And we could all do with a bit more cash right now!

So today I’m featuring an easy method for generating handy lump sums by taking advantage of the incentives being offered by some UK banks.

The banks are currently battling one another for your custom. And they are offering some enticing cash bonuses (sometimes other freebies/benefits as well) to get you to sign up. 

I have seen offers of up to £250, which is certainly not to be sneezed at. What’s more, you can repeat the process multiple times, potentially making thousands of pounds.

What bank account switching involves

Making money this way simply involves switching your current bank account to a different provider that is offering an incentive for doing so. 

An example at the time of writing is First Direct, which is offering £175 in free cash (and a range of other benefits including a £250 0% overdraft).

Other banks that have offered bank account switching bonuses recently (and may still be) include TSB, HSBC, Halifax, Lloyds, Nationwide, NatWest, Santander, RBS, Co-op Bank, and Virgin Money.

You might think bank account switching is a stressful hassle. But the good news is that most switches nowadays can be managed by the Current Account Switching Service (CASS), which makes the process quick and easy. It generally takes no longer than seven days.

CASS automatically ensures all direct debits and standing orders are switched to your new account. It also ensures that any incoming payments are automatically re-routed to it.

• Though note that continuous payment authorities, sometimes used for subscriptions and loan repayments, are NOT covered by CASS. These recurring payments are set up by providing your credit/debit card details. If you have any of these you will need to switch them manually yourself.

Once your application has gone through and your new account been opened, your bank account switching bonus will be credited to it. This can take as little as 10 days, though depending on eligibility requirements (see below) it may take longer.

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Eligibility requirements

The above are the bare bones of this method, but there are also certain requirements you’ll need to meet to qualify for switching bonuses. 

Requirements vary between banks. But typically they will want you to deposit a certain amount of cash into your new account, either as a single sum or over a period such as three months. Many banks also require you to have at least two active direct debits on the account in question.

Another common requirement is that you haven’t held an account with the bank you’re switching to previously, at least within a certain period. So with First Direct (mentioned above) you can’t ever have had ANY account with them (e.g. a current account, credit card or mortgage). Also, you can’t have opened a current account with their sister bank HSBC since January 2018. 

• If for whatever reason you don’t want to change your current account, you can still benefit from this method by first setting up a ‘burner’ account with a bank that doesn’t typically offer switching bonuses. You can then use this to switch to a bonus-paying account, as long as you can meet their eligibility requirements.

Finding bank account switching offers

Bank account switching offers come and go quite frequently. The best way to keep track of them is through specialist financial websites which are regularly updated. 

I recommend this page on the popular Money Saving Expert website which lists all the best current bank switching offers. It reveals the bonuses and other freebies that are on offer and eligibility requirements, e.g. how long it must be since you last had an account with them.

Rinse and repeat!

Of course, each switch only generates one bonus. Having done it once, however, there is no reason you can’t do it again, and again…

Just be aware that applying for a new bank account will inevitably show up on your credit record and if you do it multiple times could affect your credit score.

So it may be advisable to delay if you are currently doing something that requires a good credit score, e.g. applying for a mortgage. 

In any event, it’s probably best to apply this strategy over a longer period, rather than try to cram in every offer over just a few months.

Annie’s story

My sister Annie is a serial switcher and has made hundreds of pounds from switching over the last few years. She was kind enough to send me her story (and advice), which I have reproduced (slightly edited) below…

I’ve changed bank accounts three times in the last five years, having stayed with the same bank for the previous thirty! 

Initially I was lured by the prospect of a hefty £250 to move to Virgin Money. Then I switched again to get bonuses of £150, first with Nationwide, then more recently with NatWest. 

The process is straightforward, but you have to follow the instructions to the letter. Most importantly, I found it’s nearly always the case that you can’t have been a previous customer of the bank offering the bonus, or at least not in the last five years. Secondly, you always have to use the dedicated ‘Switch’ service. And thirdly, you generally have to pay in a minimum amount each month, including a couple of direct debits. 

Like most people, I worried that all my standing orders and direct debits would get lost or messed up in the move, but the system really does operate flawlessly. It’s a very easy way to make some money! Just read the small print. Also you will probably have to download the app for your new bank in order to qualify, but I’ve found that very useful anyway. I’m currently eyeing up another move to First Direct. My only problem going forward is that I am in danger of running out of banks to switch to!

Many thanks to Annie for sharing her story.

Closing thoughts

Switching bank accounts clearly isn’t going to make anyone rich. But in these times of financial strain, the extra money from bonuses can come in very useful indeed.

And with CASS making the whole process simple and straightforward, there really is no reason you can’t make hundreds or even thousands of pounds by this method in the months and years ahead.

As always, if you have any comments about this article, please do leave them below.

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties.

Photo by Avery Evans on Unsplash

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Q. I don’t want to bank with a company that invests in fossil fuels, how can I find out how green mine actually is and how can I believe what it says?

A. There’s a legendary scene in Absolutely Fabulous, when Edina is marketing some plastic sunglasses.

“What does that sticker with a green tree on it mean?” asks Saffy. “Kind to trees, sweetie,” she responds. When Saffy questions how, she’s told bluntly: “Well they aren’t made of wood, how kind do you want?” and that in a nutshell is greenwashing, where words like ‘green’, ‘environmentally friendly’, or ‘eco’ can sometimes mean the exactly the opposite.

Greenwashing is an incredibly complex area to research if you want to invest ethically but it usually involves using ‘environmentally friendly’ labelling that isn’t so accurate. If you want to invest ethically, you must assume that businesses might not be honest about their motivations or actions.

There are also different levels of involvement, a business could be involved in direct production of fossil fuels, for example, or it may provide funding, investment or banking facilities for fossil fuel companies.

One of the problems at the moment is there is no one standard for how banks are judged when looking at their green credentials. The Financial Conduct Authority’s Sustainability Disclosure Requirements (SDR) are due to come in to force soon and they will introduce a whole range of new rules around sustainable investments.

Until then, if you want to check out how ethical a bank or business really is, then cut out the website fluff and go straight for the annual report. These documents are usually designed to hide contentious issues under text, graphs and picturess so it’s worth skimming the key bits and searching for key words to save you time.

Many charities and campaign group, such as Reclaim Finance, also have tools and guides tell you how invested a bank is. But always yourself how objective this data is, where it was sourced from.

Martyn James is consumer rights expert and campaigner with over two decades of experience covering every business sector in the UK, from finance to utilities.

As a broadcaster and presenter, he appears on all the national television channels and is a regular guest and presenter on Rip Off Britain, Morning Live and The One Show, as well as commentating on breaking stories for all the news channels and bulletins. As a journalist, he has written for all the national newspapers and regularly features in the news.

Photo credits: Pexels

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