Best banks for switching, cashback, interest and overdraft deals UK 2021
Discover which banks give you money and other rewards for opening an account in the UK
Whatever the reason why you are looking for a switching bonus, this guide has the insights you need to make an informed decision.
What's in this guide?
- Compare switching rewards and deals
- Best switching deals
- High interest current accounts
- Banks that offer fee-free overseas spending
- Best deals and rewards for students
- Best deals and rewards for business owners
- Best deals and rewards for children
- Best banking app deals
- What's a switching bonus?
- Should I switch current accounts?
- Why do banks offer switching bonuses?
- What happens when you switch?
- Pros and cons of switching
- Frequently asked questions
Compare switching rewards and deals
From time to time, some banks offer customers a reward or a bonus for switching. Below we have listed some of the best offers currently available.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Best switching deals
If you are looking for some easy money, a switching deal could be the best way. You must however switch and close your old account to get the bonuses listed below. The following banks currently have switching offers.
- First Direct – £100 switching bonus
- HSBC – £15 switching bonus
- TSB – £55 cashback for opening an account
- Virgin Money – 15,000 virgin points to spend on Virgin related products and linked retailers
High interest current accounts
We have created a guide on high interest current accounts that gives a good overview but below we have highlighted some key offerings.
- Virgin Money – 2.02% on balances up to £1,000
- Nationwide – 2% on balances up to £1,500
Banks that offer fee-free overseas spending
Best deals and rewards for students
If you are a student and looking for the best student account with rewards or deals then we have a page dedicated to the best student bank accounts and the rewards on offer.
- 123 Student Current Account from Santander – Free 16-25 Railcard for new customers.
- Bank of Scotland’s student account – Everyday Offers – Earn up to 15% cashback from selected retailers when shopping with a Bank of Scotland credit or debit card. Customers must be over 18, register for internet banking and activate the offer to be eligible.
- Barclays Student additions – Free 12-month subscription to Perlego the online library when opening a Student Additions account.
Best deals and rewards for business owners
If you run a business and wish to switch account, we have a dedicated guide on the best business bank accounts. Some business bank accounts are known to offer deals such as free company registrations, accounting software integrations, favourable foreign transaction fees and free introductory periods.
- Tide – Register a limited company for free when you open an account.
- Mettle – Free accounting software you can integrate your business bank account to.
- Starling – Use Starling’s business toolkit free for the first month.
Best deals and rewards for children
Recently a number of banking apps have started popping up around children’s banking. These apps can help children spend, budget and learn about good financial habits early on in life.
- gohenry – A personalised custom card with your child’s name on plus the first month free.
Best banking app deals
Over the years a number of banking apps have come on to the market with innovative features. Some of these apps have deals when downloading the app and opening an account.
- Curve – An app that helps you connect all your bank cards so a single card is offering £10 added to your card when you use the code FINDR.
- Chip – A savings app that automatically connects to your current account and stashes money away automatically is offering access to its Chip+1 account which provides a 1.25% return on savings of up to £10,000 when you use the code FINDER20.
What’s a switching bonus?
A switching bonus is what you can get for transferring your current account to a new bank. So, it’s basically a bank “giving you money” for getting an account with it.
Switching bonuses are usually offered by big traditional banks, and they can be temporary offers lasting a few months.
They usually apply when you complete a full switch of your current account, and this will often include a minimum number of direct debits that you have to move. You won’t usually get a bonus for opening a new account (that’s why it’s called a “switching” bonus).
Should I switch current accounts?
The answer depends on your circumstances, so only you can determine that. But here are a few things to think about:
- Are you with your current bank because it offers good service? Or are you with it because you’ve been too lazy to do the switch so far?
- Switching current account is pretty easy. Thanks to the current account switch service (CASS), all your payments and direct debits will be transferred automatically within seven days. The two banks will handle the process and you’ll barely have to lift a finger.
- A switching bonus is a temporary benefit. Whereas your current account is something you use pretty much every day, even if you don’t really think about it. If the bank you are considering has a really juicy switching bonus offer but an awful mobile banking app, it may not be worth putting yourself through that kind of misery for a few quid.
- Banks are awful at rewarding customers for their loyalty. Banks know that people really don’t want to go through the hassle of getting a new account; once they’ve got someone as a customer, they don’t need to do much to keep them. So switching is more likely to land you a better deal.
So, weigh the pros and cons carefully. If you do decide to switch, ideally you want to pin down the best combination between a nice switching bonus and a reliable bank that offers a good long-term service.
Why do banks offer switching bonuses?
To put it (very) simply, banks want your money. It’s how they are able to provide services such as mortgages and loans, which in return generate their profits.
But, as we mentioned above, people hate moving bank accounts. With the notable exception of a few personal finance junkies like yours truly, most people just want to have a bank account that works and then not to think about it ever again.
So, for banks, getting new customers is quite hard. Switching bonuses are one of the marketing tools available to them to entice people to transfer their accounts and money with them.
What happens when you switch?
If you go through with a switch, all your incoming and outgoing payments are automatically transferred to your new account. This includes your salary, all your bills as long as they are paid by direct debit or standing order, and most importantly any future payments you might receive from someone who has your old banking details (the service will also contact them to let them know the new ones!).
You can pick your switching date in advance, and even transfer an overdraft as long as your new bank agrees to it. Once it’s all done, your old bank will close your old account, and you’ll be all set with your new one. If your new bank offers a switching bonus, you’ll receive it once the switch is complete.
Using CASS is free, easy and you are likely to end up with a better deal or a better banking experience. However, keep in mind that the service only works for current accounts, so savings accounts will not be transferred.
You will also need to update all your regular payments made via debit card manually, and these can be a lot (for example, your PayPal or Amazon accounts will have memorised your debit card details, not your current account details, so you’ll need to change them when you get your new debit card).
Pros and cons of switching
- You can get a nice switching bonus (and use it to treat yourself!).
- You can choose a bank that offers a better customer service or a better mobile app… whatever you don’t like about your current bank, you don’t have to put up with it!
- All payments are automatically transferred to your new current account thanks to CASS.
- It’s free and fairly quick; the switch has to be completed within seven days.
- Other accounts you might have with the same bank, such as savings accounts, will not be transferred.
- You will need to amend your debit card details.
Frequently asked questions
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