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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A long-term study of the benefits of working a four day week in Iceland suggest it has little negative impact on workers.

The study conducted in Iceland between 2015 and 2019 allowed workers to do their jobs in 35-36 hours over four days instead of five, for the same pay. It found productivity of businesses remained the same or even improved.

Analysis of the study by think tank Autonomy and the Association for Sustainability and Democracy (Alda) found wellbeing among the participants in the four day week trial improved “dramatically” in every area from stress and burnout to health and work/life balance.

They add the change in routine cost the participating organisations nothing over and above the normal costs of doing business.

• Your Questions Answered: Have you got a burning money question? We want to help! We’ve got a panel of experts on hand that can explain and give guidance to you for your personal finance problems. Find out how.

Halifax launches current account switching offer

Halifax Bank has launched a new current account switching offer, upping the stakes as more providers look to attract new customers.

Customers can switch their current account to Halifax and get a £100 bonus. The kicker, however, is the offer is only available on its Ultimate Reward Current Account which costs £17 a month to open.

In exchange for the fee, you’ll receive AA breakdown cover, home emergency cover, mobile phone insurance and worldwide travel insurance. This may not be worth it if you already have these products covered under other policies such as your home insurance.

Alternatives to this at the moment include £100 to switch to first direct, or £125 to switch to HSBC.

Two in five first-time buyers get on the ladder early

The pandemic has helped some first-time buyers get on the property ladder early, according to Yorkshire Building Society.

Two in five say their plans to buy a home have been accelerated. This is mainly thanks to extra savings made during the pandemic, with an average of £500 extra each month saved.

That said, YBS say the average first-time buyer still faces a wait of four years before they can save enough for a house deposit.

Photo by olia danilevich from Pexels

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LISTEN: Mouthy Money co-editor Edmund Greaves appears on talkRADIO to discuss why people are hiding bank accounts from family, the cost of owning a car during the pandemic and if streaming services like Netflix could really help your credit rating.

With thanks to talkRADIO.

Photo by freestocks.org from Pexels

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