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.

More from Nick Daws on Mouthy Money

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

The post How to make money through bank account switching appeared first on Mouthy Money.

High Street bank NatWest has been forced to give out up to £500 in compensation to customers for closing their accounts.

The Financial Ombudsman Service (FOS) has said the bank was within its rights to close some customer accounts but that the way it handled the process was unfair, awarding customers compensation of up to £500 for the issue.

Banks are increasingly heavy-handed with customers as they intend to comply with fraud and proceeds of crime legislation. This can lead to some innocent customers being caught out and having their legitimate funds frozen and their accounts closed.

NatWest was within its rights to withdraw services to customers as it sees fit, but the FOS ruling on compensation relates to the way the bank handled the process.

A NatWest spokesperson comments: “We have clear legal and regulatory responsibilities to protect our customers and accounts from fraud and the proceeds of crime.

“We take these responsibilities very seriously and will act if we detect any activity that falls outside those controls.

“A decision to close a customer’s account is only reached after very careful consideration.”

Anyone caught out with a frozen account should in the first instance attempt to speak to their account provider first. The FOS says only if a resolution is not reached then customers should contact it to proceed with a complaint.

M&S Bank to shutter current accounts

Current account provider M&S will close all its current accounts today.

Customers have until 4.30pm this afternoon to switch away their current account to another provider using the Current Account Switching Service (CASS), or face losing access to their cash. Anyone in this position will have to contact the bank on 0345 900 0900.

If you don’t want to switch you can close your account by holding a balance of zero in it. However any direct debits or other payments could then be missed and incur costs elsewhere as a result.

Older people in employment rises

Around 42% of over 50s are in work now compared to just 31% in 1992.

The figures from Legal & General show how the UK’s workforce has changed over time with more older people staying in work until later in their lives. People in their sixties saw the biggest shift, with 23% working in 1992 compared to 41% now.

The changes to the landscape of the workforce come with raising of the State Pension age and the scarcity of old fashioned ‘final salary scheme’ pensions which pay guaranteed incomes for life.

L&G found the typical retiree looked to have an income of £23,000 per year in retirement.

WATCH: Mouthy Money co-editor Emdund Greaves discusses all these news stories with James Max on talkRADIO:

Photo by Dom J from Pexels

The post NatWest forced to give out up to £500 compensation to customers for closed accounts appeared first on Mouthy Money.