The battle between the banks to attract more current account customers moved up a level this week when Yorkshire Bank (and Clydesdale bank) launched a market leading £150 switching incentive.
Halifax, First Direct and The Co-operative Bank already offer a £100 ‘golden hello’ (the latter also gives £25 to charity), if you switch your bank account to them, but Yorkshire Bank has upped the ante.
As much as a cash incentive may sound appealing, it shouldn’t be the only basis on which you choose your current account.
There are a wide range of bank accounts on offer from high street providers and the newer challenger banks, however there’s not one account that works for everybody and the best account for each individual depends on the way they run their day to day finances.
Some people will make regular use of an agreed overdraft limit and spend a good few days each month in the red, whereas other people manage their money differently and always maintain a credit balance, so in each case their choice of bank account should reflect this.
The £150 incentive from Yorkshire and Clydesdale Bank runs from 17th November to 28th February next year, but you must use the official Current Account Switching Service (CASS) and close your existing account to qualify.
The pick of the current accounts from Yorkshire Bank is its Current Account Direct, an account designed for self service and operated via online banking or telephone.
If you have no need to visit a bank branch and have a monthly net income of at least £1,000, then this account is worth a look as the overdraft rate of 9.9% EAR is one of the most competitive around whilst the in credit rate of 2% up to a maximum £3,000 is decent too.
For those customers where credit interest is the key attraction, check the offers from TSB paying 5% AER on the first £2,000 or Tesco Bank at 3% up to £3,000, but for the customer with a bigger bank balance always in the black, Santander 123 pays 3% on balances from £3,000 right up to £20,000.
If a low cost overdraft is your priority then beware of banks charging daily or monthly fees including Halifax, Barclays, Santander, Lloyds, NatWest and TSB as they can prove expensive particularly on smaller short term borrowing.
More financially savvy alternatives are First Direct where the first £250 is interest free or M&S Bank with no charge on the first £100 of an agreed overdraft.
If you’re not getting the best from your existing bank account, now’s a great time to switch as there’s plenty of choice plus you can move your account hassle free within 7 days under the new CASS scheme.