Banks are increasingly reserving their best deals for current account holders in a bid to tempt you into switching. Can you beat them at their own game?
Banks are increasingly reserving their best deals for current account holders in a bid to tempt you into switching.
We’ve seen a host of such deals hitting the market in recent weeks.
The Co-Operative Bank waived the £999 fee on its five-year, 75 per cent loan to value, fixed-rate mortgage to existing customers.
It has also launched a range of exclusive tracker deals.
Similarly, Santander’s new savings bond that pays interest upfront rather than on maturity also requires a current account.
And First Direct is offering customers a phenomenal 8 per cent rate on its Regular Saver account.
In fact, some banks are so keen for your business that they’ll even pay you to switch.
Santander and First Direct both offer a £100 welcome bonus while the Co-Op was offering a head-turning £200 last month, before pulling the deal due to massive demand.
It's all about the money
So why are they doing this? They want to become your main bank, that's why.
That way they can cross-sell you any number of other products, from mortgages to credit cards to savings accounts.
No doubt you’ll have noticed your current bank constantly writing or emailing you about all their wonderful offers.
Put simply, they hope to become your first port of call when looking for new product, rather than shopping around.
Is it worth switching?
Some of the deals reserved for customers really are great deals, so if you desperately want access to them you’ll have no option but to switch.
Savvy customers might think they can simply open an account to nab the welcome bonus or product they want and keep their main bank account where it is.
But, wise to this trick, most banks require that you pay a sizeable sum into the new account each month in order to qualify for the deal, usually around £1,000 or £1,500.
Essentially, they want you to pay in your salary, thus making this your main account.
How else can I get a good deal?
In truth, switching current accounts just for a juicy rate seems like a lot more hassle than it’s worth in most instances.
What’s more, if you’re happy with your current bank you may find that the grass isn’t greener on the other side.
But it’s not all bad news.
While it’s true that First Direct really does have the best regular saver rate and the Co-Operative five-year fixed-rate mortgage is pretty hard to beat, there are still a number of best buy financial products freely available to everyone.
Best buys
For example, the longest 0 per cent balance transfer credit card on the market - 22 months - can be found at Barclaycard.
And you can get £30 cashback when you take out a Barclaycard through Confused.com (conditions apply).
If it’s a new purchase credit card you’re after, Tesco will give you 15 months at 0 per cent on its Clubcard Credit Card.
On the savings side, Vanquis Bank pays an impressive 4.55 per cent on its five year, fixed rate high yield bond.
As for access accounts, Nationwide’s best buy MySave Online Plus is one worth considering.
So while it is annoying that some banks are shutting the doors on many would-be customers, it’s good to know that most best buy products are available to everyone – for the time being, at least.
