Halifax reignites the current account switching war with £100 cash bribe

The current account switching war is ramping up this week with Halifax reintroducing its £100 switching offer tomorrow.

Those switching to Halifax’s Ultimate Reward Current Account will only find similar cash bribes offered by two other banks – First Direct is also offering switchers £100 whilst HSBC a slightly bigger £125.

However, the cash carrot is not that clear cut. The Ultimate Reward account comes with a £17 monthly fee, as it is packaged with AA breakdown cover, mobile phone insurance, worldwide travel insurance and home emergency cover. 

That means over the course of the year, that £204 annual cost will simply be slimmed down to £104 with the incentive.  

New customers switching to Halifax’s Ultimate Reward Current Account will receive £100 beginning from Wednesday.

Those opening the account benefit from a six month fee free overdraft and they can also earn as they spend with up to 15 per cent cashback at selected retailers including the Co-op, Costa and Sky.

Halifax customers can also sign up to a monthly reward scheme enabling them to choose either two movie rentals, access to three digital magazines, one Vue cinema ticket or £5 paid directly into their account each month.

Those opting for the last option will essentially have another £60 shaved off the cost of the account in year one, meaning a £44 outlay for all of the benefits – or roughly £3.67 per month.

To qualify, switchers must pay in £1,500 and stay in credit during the month and either spend £500 on their debit card or keep a balance of £5,000.

‘The account offers fantastic benefits and rewards – including insurance cover, lifestyle benefits, cashback and more,’ said Martin Turner, head of personal current accounts at Halifax.

‘The Current Account Switching Service makes it really easy to join us, transferring direct debits, standing orders and salary commitments, to your new account within seven days.’

To qualify for the £100 bribe, customers must open a new Ultimate Reward Current Account using the current account switch service, from a bank account held with another provider by 3 August.

The bribe is not available to existing Halifax Current Account or Reward Current Account who may also be tempted to switch.

The £100 will be paid directly into a new customer’s account within three working days of their switch completing.

How does it compare to other cash incentives?

Whilst falling short of the £125 cash incentive offered by HSBC, targeting customers for its Advance and Premier Accounts, the Halifax offering is a little more accessible.

For the HSBC Advance Account, you must pay in a minimum of £1,750 per month, and for Premier account you must have an annual income of at least £75,000 and have at least one of either a mortgage, an investment, life insurance or protection product with the bank.

However, in addition to this, HSBC is also offering £100 cashback to its customers who decide to open an investment account, meaning there is the potential of earning a total of £225 in cash incentives for eligible customers.

To be eligible for the extra £100 bribe, customers must open a Global Investment Centre account, only available to HSBC current account customers and invest a minimum of £4,000 within 30 days. 

But customers should do their research before opting for an HSBC investment account, as other platforms and providers may suit their needs better. 

First Direct’s current account, which comes with no monthly fee, may also be tempting to switchers due to its lower barrier to entry.

To qualify, joiners will only need to pay in at least £1,000 within three months of opening the account. 

It lacks the array perks offered by Halifax but it does still come with £250 interest-free overdraft, whilst the fact its free will appeal to those put off by Halifax’s £17 monthly charges.  

Should you switch?

Banking customers looking to switch their account may be wise to act quickly to take advantage of the upfront perks.

Research by Moneyfacts suggests that many of these offers will not be around for long.

HSBC for example, has been offering £125 for switchers since 10 June, but it had previously offered the same perk for five weeks before removing it on 25 May, whilst Halifax removed its previous £100 cashback offer in May, after only being available for four weeks.

‘Consumers looking to make their current account work harder for them may wish to review their current package in light of new incentives being launched onto the market,’ said Rachel Springall Finance Expert at Moneyfacts.

‘As we have seen before, switching perks can be withdrawn quickly and consumers could not only receive a cash perk or gift card for switching, but they could earn other rewards or save some money by moving away from their existing current account provider.’

Switchers are also being urged to check the overall package of the deal and not be swayed by simply one headline grabbing perk such as a cash bribe.

‘It’s important that care is taken when comparing offers and consumers would be wise not to get blindsided by an upfront perk, as it’s the overall package of a deal that must be weighed up before they commit to a new current account,’ said Springall.

‘Those looking to borrow would be wise to compare overdraft tariffs carefully as many accounts now charge more than 30 per cent, whereas one of the best deals with a lower charge comes from Starling Bank at 15 per cent.  

‘In addition, First Direct currently has a £250 interest-free overdraft – albeit thereafter charging 39.9 per cent. 

‘Those consumers looking to save a bit of money in their account will find a few options paying credit interest, including Virgin Money which pays 2.02 per cent on balances up to £1,000 and Santander which pays 0.3 per cent on its 123 Current Account on balances up to £20,000, equating to £60 a year gross.’

This post first appeared on Dailymail.co.uk