Christmas is a joy for kids, but a pain for purses. Yet, if you’re very quick, you may be able to make up to £175 free cash in time for Christmas, but more likely to clear the Christmas bills in January – and while you’re at it, you’ll likely get a better bank account too.
This is all about switching bank accounts. Four banks are currently willing to bribe you (legally) to switch. Act now and you may be able to pocket the money in time.
Switching only takes seven working days. Three of these accounts that pay you promise to pay the bonus within a month of that. Overall that’s a maximum of 40 days. So, at the very worst, the money will be in your account to help with the January squeeze – which for most people means you have to deal with a longer gap between paydays.
For the full rundown of options and eligibility criteria see www.moneysavingexpert.com/bankaccounts – but, in brief…
l Free £175 + 2.75 per cent regular savings.
Switch to www.hsbc.co.uk Advance account and you can get £175 free cash. It also lets you save up to £250 per month in its linked 2.75 per cent AER fixed regular savings account. Its minimum monthly pay in is a relatively large £1,750 per month (equivalent to £25,900 salary), and you also need to have at least two direct debits/standing orders switched over.
l Free £100 M&S gift card without paying anything in, plus possible £80 gift card. Switch to bank.marksandspencer.com and you get a £100 M&S gift card even if you don’t pay anything in, though you do need to switch a minimum of four direct debits.
Plus, if you can pay in £1,250 a month (£17,000 salary), keep at least four direct debits active, and register for online banking and statements, you can earn an additional £80 gift card in 12 months (perfect for next Christmas). You can also save up to £250 a month in its 2.75 per cent AER fixed regular savings. Its customer service rating is good too at 68 per cent.
l Free £50 – but also top service.
Switch to www.firstdirect.com and pay in £1,000 within three months and you’ll get a £50 cash bonus. Though it’s the smallest cash amount, if you want a bank with top service, 85 per cent rated it great in my last poll. You’ll also get a £250 0 per cent overdraft, and can open a linked 2.75 per cent AER regular saver.
What do you need to do to switch?
To get the free cash there are a few things needed to qualify. You’ll need to:
l Pass a not so harsh credit check
l Use the banks’ official switching services to get the free cash
l For some accounts pay in a minimum monthly to get the cash – don’t worry, it’s just to get you to pay in your salary. And a tip: if you don’t meet the minimum pay in, you can always withdraw some cash and pay it in again the next day to make it up to the total.
Switching is very easy – in my last Twitter poll on it, 76 per cent of you said switching was hassle-free and easy, like Clare who tweeted “@MartinSLewis I switched bank accounts a week ago! I got my £125 today, was a quick and easy process” and Jen tweeted “@MartinSLewis Just switched bank accounts for first time don’t know why I was so scared thanks Martin Lewis”.
Yet if people are telling you their bank switching nightmares, ask when they did it. Often they’re old financial war stories. For the past six years we’ve had the switching guarantee in place which has made things far easier.
In seven working days your new bank moves all your money across, and any payments in and out (including direct debits and standing orders) moves from your old bank to the new one. Your old account then closes. You also get added protection where payments made to your old bank are auto-forwarded for at least three years.
If you’re overdrawn don’t think you can’t switch to another account – you can. But you may just not get the same overdraft limit as your current account. For full overdraft help see www.mse.me/overdrafts.
If you’re only just in your overdraft, use the free cash to clear it, but if you often go into the red, focus on cutting overdraft costs instead. The First Direct deal above gives many a £250 0 per cent overdraft as well as the £50 – a useful buffer if you slip over (you pay interest at 15.9 per cent EAR variable above £250).
Alternatively, www.nationwide.co.uk FlexDirect account gives a year’s 0 per cent overdraft but no free cash. Yet there’s no set limit – it depends on a credit check. If you get it, use the year to clear the overdraft as after you’re charged a big 39.9 per cent APR interest with no buffer after.
Martin Lewis is the founder and chair of MoneySaving
Expert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip