Banks offering £200+ to switch – how to earn £1,000 free

The Rise of Switching Incentives

Banks are once again competing fiercely for customers by offering generous switching incentives. Many institutions are now providing rewards of £200 or more to individuals willing to move their current accounts. These offers can quickly accumulate, prompting financial experts like Martin Lewis to suggest that now might be an opportune time to consider a "burner bank account."

Martin Lewis, a well-known consumer champion, recently took to social media to discuss the potential of using a burner bank account to generate significant income through switching. He noted that eight banks currently offer £175 or more to switchers and emphasized that with the right approach, it's possible to make thousands of pounds.

The concept involves maintaining your main bank account while utilizing a secondary account to switch between different banks that offer cash bonuses. However, the question remains: is this strategy as straightforward as it seems? This article explores the best switching deals available, evaluates whether opening such accounts is a sensible strategy, and considers whether chasing these cash incentives is worth the effort.

Top Switching Deals Available

Several banks are currently offering attractive switching bonuses:

• HSBC: Offers the highest mainstream switching bonus at £220 for eligible customers who move to its fee-free bank account. It also provides access to HSBC’s global money account for spending abroad. To qualify, customers must switch via the Current Account Switch Service (CASS), transfer two direct debits, pay in £2,000, and spend £500 on their debit card within 60 days.

• first direct: Provides £200 to customers who switch to its fee-free 1st account. It also includes access to a 7% regular saver and fee-free overseas card spending. Customers need to switch two direct debits, pay in £1,000, and make five debit card transactions.

• Barclays: Pays £200 to customers who switch to its standard bank account. The account has no monthly fee and offers access to Barclays cashback offers. To receive the bonus, customers must complete a full switch, move two direct debits, and pay in £2,000.

• NatWest: Offers a £200 incentive on its Select, Reward, and Premier accounts. The Reward account also pays monthly cashback to eligible customers, although it carries a £2 monthly fee. To qualify, customers must pay in £1,250 and log into the banking app. The Premier account has no fee but is only available to those meeting specific eligibility criteria.

• Co-operative Bank: Pays its £200 reward in stages, with £125 paid shortly after switching and the remainder over the following three months. Its fee-free current account also gives access to a regular saver paying 7% interest, while the Everyday Extra account includes travel insurance, breakdown cover, and mobile phone insurance – although it has a £12 a month fee.

• Santander: Offers £180 to customers switching to its Everyday, Edge, Edge Up, or Edge Explorer accounts. Customers must pay in £1,500 and switch two direct debits. While Everyday is a fee-free option, the Edge range charges fees but offers cashback on household bills and supermarket spending.

• Nationwide: Provides a £175 incentive on its FlexDirect account, which pays 5% interest on balances of up to £1,500 for the first year. Eligible members have also received Nationwide’s annual fairer share payment in recent years, although there is no guarantee it will continue.

Is a Burner Account Worth It?

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, suggests that using a separate account purely for switching can make sense, provided it is a straightforward, fee-free one. She highlights accounts from Chase, Monzo, Starling, Halifax, Bank of Scotland, and Santander as suitable options.

Using a spare account means keeping your salary and household bills with your main bank while completing each switch. However, experts warn that making £1,000 through switching requires organization and patience. Most banks require customers to use CASS, transfer existing direct debits, pay in between £1,000 and £2,000, and make a certain number or value of debit card transactions before the money is paid.

Springall notes that switching bonuses can be a great financial boost, especially for those who already have more than one current account. She emphasizes that a bank account should not be chosen solely based on an upfront switch offer, as other factors may be more important. Additionally, some accounts may be worth keeping even after the switching bonus has been received.

For those unsure about the process, Andrew Hagger, founder of MoneyComms, advises trying it once and seeing how the experience feels. If satisfied, there's no reason not to take advantage of another cash deal.

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