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- The free cash bank-switch top picks
- Bag £180 on top
- Switch overdraft to 0%?
BEST BUYS & TOOLS
The bank-switching market blows hot and cold. Six weeks ago there were none, now it's back with aplomb, with four banks willing to (legally) bribe you to switch. So unless your current bank tickles your toes and keeps you happy, consider switching to make some cash.
Switching's usually quick & easy. The bank's 7-working-day switch service will close your old account and auto-move your balance, standing orders & Direct Debits for you. After, any payments to your old account are auto-forwarded. You'll need to pass a not-too-harsh credit check.
Normally not available if you've been a recent customer with the same banking group, see full info & eligibility criteria in Best bank accounts
Santander Edge*
Service: 69% great
Min pay-in for all perks: Pay in £1,500+ within the first 60 days, then have £500/mth (equiv £6,000/yr income) going in. Also needs 2+ Direct Debits set up.
- 1% back on BILLS paid via Direct Debit (including council tax, water, energy)
- 1% back on GROCERY & TRAVEL (fuel, train, bus) spending
That's a gain of £80/yr to £100/yr, after the fee, for typical bills (for big bills, Edge Up pays more cashback). Plus, open Edge & you can access its linked 1yr 7% savings for up to £4,000, easily beating the top normal easy-access account (maxed out, it's ~£270 interest).
The Edge debit card also has no foreign exchange fee when you spend abroad, so you get the same near-perfect exchange rate as the bank does.
Quick tip: Once you're a customer, you can apply for its Edge credit card* which pays an unbeatable year-long 2% cashback on almost all UK & overseas spending, up to a max £15/mth (again for a £3/mth fee). Of course, only do this if you'll pay off the card IN FULL each month to avoid the 29.8% rep APR interest.
Service: 91% great
Min pay-in for all perks: No monthly pay-in, but for the free £175 you must put total of £1,000+ in within 30 days (can then withdraw it), use debit card 5+ times, log in to its digital banking service & switch over 2+ Direct Debits or standing orders.
It gives many an ongoing £250 0% overdraft, useful for anyone who dips into it on occasion (and hopefully the free £175 helps pay off some of that).
It also allows you to save £300/mth into its linked 1yr 7% fixed-rate regular saver (maxed out, that's £136 interest) and, like Santander, its debit card doesn't add a foreign exchange fee when you spend abroad, so you get the same near-perfect exchange rate as the bank.
Service: 59% great
Min pay-in for all perks: Needs £2,000 each month (equiv £28,500/yr income) or there's a £3/mth fee (so avoid). Must switch 3+ Direct Debits too.
It also has a linked regular savings account, with a slightly lower interest rate than First Direct, at 6.25% fixed for a year, but the benefit is that it allows you to put more in, £400/mth (maxed out, that's £161 interest).
Service: 35% great
Min pay-in for all perks: NONE, but as you'll read it's all about debit card spending.
Yet to get the free £100, you need to spend on the card (includes contactless) 5 times in the first month, then for the £10/mth, you need to spend 20+ times each month (so you could split shopping up to make it count). Do the same in Dec 2024 and you'll earn the extra reward in Jan 2025.
- Existing Nationwide customer? Possible FREE £200. If you had a Nationwide current account, savings account or mortgage on 31 March 2024, you can get a £200 bonus by switching a non-Nationwide current account (including 2+ Direct Debits) into a new or existing FlexDirect*, FlexPlus*, or FlexAccount. But you can't have received a switch bonus from Nationwide since 18 August 2021. You may also get a 0% overdraft with it, too.
- Will switching bank impact my credit score? One extra search on your credit file shouldn't make much difference (though many in a short time can). Some lenders do score you down for switching bank accounts as they like evidence of longevity, but this shouldn't be an issue for most.
For belt 'n' braces safety, if you're imminently (within a couple of months) about to apply for a mortgage or an important, needed debt, it's probably best to prioritise that, otherwise one bank switch isn't really an issue. More in how switching banks impacts your credit.
The Chase current account* is a different beast from those above, and you can combine them as it's an app-based bank you DON'T need to switch to to get, there's no hard credit-check (just an ID check) and it's fee-free.Spend on its debit card and you'll get at least a year's 1% cashback on all normal daily debit-card spending up to £15/mth (it generally excludes bills, investments and major purchases, such as cars). If you hit the max, which many who put all family spending on it do, you'd make a further £180.
This is stupidly easy to do (though probably not worth it right now if you're getting Santander Edge & the Edge credit card). Just use the other accounts to pay your salary into and pay bills from, then fund Chase and use its debit card to spend on. It's also the top for spending abroad too and has a new top-rate easy-access savings deal.
Done carefully, you can switch multiple times. Some even open 'burner accounts' just for switching. Full help, pros and cons in Make £100s or £1,000s switching banks. Many people do it, including some here in MSE Towers.
And to show you how well it can work (as part of a carefully controlled money-making system), Simon emailed us:
"Over 12 months my wife and I undertook 10 bank switches, managed our spending through stoozing, and made sure we used cashback sites for purchases. Through these methods, we managed to amass £3,000 which we used to pay for a seven-day family holiday in Rome, which we loved.
"We managed this all through the help of MSE. Thank you MSE for paying for our holiday - we'd not have been able to go to Rome without your help."
Too many think 'credit cards bad, debit cards good'. For those overdrawn, it's more a case of 'credit cards bad, debit cards worse', as almost all overdrafts are now charged at a typical 40% interest - nearly double even a bog-standard high-street credit card.
Yet there are ways to cut this. You CAN switch banks when overdrawn, though there's no guarantee it'll offer you an overdraft or even match your existing overdraft. Yet all banks below have overdraft eligibility checkers you can use before applying to see if it's likely you'll qualify. Full info in top overdraft accounts, but in brief...
- Owe less than £425? Get paid to switch to a 0% overdraft. First Direct* (detail above) offers new switchers £175, and many get a £250 interest-free overdraft. So if your overdraft's up to £425, the £175 pays some off and the rest is at 0%. Above that you'll pay 40%, like elsewhere. Full info: First Direct.
- A year's potentially bigger 0% overdraft. Nationwide FlexDirect* can offer a far bigger (or smaller) 0% overdraft, as the limit depends on your credit history. However, it's only 0% for a year - then it's the standard 40% like most providers. So plan to clear the debt within that time. Full info: Nationwide FlexDirect.
- Do a 0% money transfer. These specialist cards pay money into your bank account so you then owe them instead. You can get up to 12mths 0%, though be careful, it's easy to get it wrong. Our Money transfers guide takes you through it, including top deals.
The rate isn't the only thing to focus on. Our Cut overdraft costs guide takes you through it, but here are Martin's 5 most important tips:
1) Aim to repay a fixed monthly amount. For example, if you're £500 overdrawn, 'paying' £100 means aiming to be £400 overdrawn at month end. A budget will help.
2) Consider moving Direct Debits to just before payday. The idea is you're overdrawn for less time, so costs are lower.
3) Got savings? Use 'em to clear it. See Repay debt with savings?
4) Can you reclaim past bank charges? See Bank charge reclaiming.
5) Struggling with all debt? Get free help from Citizens Advice, National Debtline or StepChange. It can make a huge difference.
DON'T believe the fake 'Martin Lewis' or 'MSE' ads
Lots of scam ads litter social media and even newspaper websites - some of these lie that we or Martin promote Bitcoin, binary trading etc. See Fake ads warning.
