Tweet
If you are thinking about switching your current account to another bank, would £100 stuffed in your back pocket be enough to tempt you? Alliance & Leicester this week fired a fresh shot in the battle for customers by offering this tidy sum to those who switch over to it in a bid, it says, "to encourage people to break free from poor-value bank accounts".
From Monday, new customers moving over to its Premier or Premier 50
current accounts will receive a £100 boost – cash that could be very useful if your finances have taken a hammering over the festive period. You can apply online, by phone or in a branch.
"This is a win-win for customers. They get a market-leading current account to make their money stretch further, and they also get to pocket £100," says Andy Muddimer, current account manager at A&L, which is owned by the Spanish banking giant Santander.
The Premier account has no monthly fee, off ers 0% interest and no usage fees on arranged overdrafts for the first 12 months, and comes with free annual multi-trip European travel insurance worth up to £60 (there is an upper age limit of 65). But it only pays 0.99% gross interest on credit balances up to £2,500. Above that amount, the interest rate falls to just 0.1%.
Premier 50 is available only to people over 50 and costs £10 a month, which means many people will either not be eligible or will not want to consider it. However, this account does off er a credit interest rate of 6.31% gross fixed for one year on balances up to £2,500, and 0% interest and no usage fees on arranged overdrafts for the first 12 months. It also throws in annual worldwide travel insurance for customers up to the age of 79, some health benefits, and identity protection.
You need to be aware that A&L will not be handing over your £100 immediately. It says the payment will be made within four months of the account being opened, provided your direct debits and standing orders have been transferred using its switching service, and that Premier current account customers have paid in at least £500 within 11 weeks.
A&L is not the only bank offering freebies in a bid to encourage people to switch their affections. Internet and phone bank First Direct also off ers £100 if you choose its current account, and another £100 if you are not happy and want to leave. Bear in mind that First Direct does not pay interest on current accounts, and that some customers have to pay a £10 monthly fee.
HSBC has launched a "January sale" online and in branches, with a halfprice offer on its fee-paying HSBC Plus current account. If you open an HSBC Plus account before 25 January, it will reduce the monthly fee which is usually £12.95 to £6.47 for three months.
However, if you are considering making a move you need to look carefully at the different offers to see which will suit your needs. For example, the right current account for a customer who never goes overdrawn probably won't be the best bet for someone who dips into the red regularly, says Kevin Mountford at price comparison site Moneysupermarket.com.
Because A&L's £100 off er is only available on its Premier accounts, for those who are always in credit, Halifax's High Interest Current Account may be a better deal, paying 2.47% interest, he adds.
Next month will see Halifax launch its Reward Current Account, which will off er consumers £5 a month in interest, regardless of the balance held. But with an overdraft structure that charges £1 a day for up to £2,500, this account could prove costly, even if you only go into the red by a couple of hundred pounds, Mountford says.
Some current account holders have been reluctant to switch to another bank or building society because they are worried that the process will be a nightmare, with payments going astray and so on. But banks insist people have nothing to be concerned about. The industry's code of good practice sets out minimum standards on what people can expect when they move. Many institutions have introduced dedicated switching teams who will handle all the legwork for you, and some even off er payouts if the account is not switched within the specified time.
r.jones@guardian.co.uk
guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
