Over the last month, several major banks have shelved current account switch deals offering hard cash to new customers.
Cash deals from the likes of Barclays, The Co-operative Bank, First Direct and Lloyds have all been scrapped over recent weeks.
Just last week, Barclays pulled its £175 deal for switchers after launching in July, while earlier in August, First Direct dropped its cash sweetener offering the same amount.
While these cash incentives for current account switchers have been axed, savers should still consider alternative providers for their everyday banking.
According to Moneyfacts, there are still opportunities on the high street and from challenger banks where you can benefit from a switch.
Rachel Springall, finance expert at Moneyfacts, said: “Customers should not be deterred from ditching and switching to an account that works harder for them, as there are still some decent packages available to suit different circumstances.”
Aside from hard cash, in-credit interest could be a worthwhile perk.
For instance, the Nationwide FlexDirect account comes with a 5% AER rate for 12 months on balances up to £1,500. It drops to 1% AER after that period.
Another account you may want to consider is the Santander Edge Up current account, which offers 1% cashback on debit card spending on groceries and transport, as well as 1% back on household bills (both capped at £15 a month). It costs £5 a month.
It also offers 3.50% AER on balances up to £25,000, plus the chance to sign up to Santander Boosts to get entry into prize draws, earn cashback or vouchers.
Another account rated by Moneyfacts is the Starling Bank Current Account, which pays 3.25% AER (3.19% gross) credit interest on balances up to £5,000. The big draw is that there are no fees for using the debit card overseas, plus it has a low rate if you need to dip into your overdraft.
It would cost you £1.35 to borrow £500 for a week, with the EAR at 15%, compared to Santander’s 39.94% EAR and Nationwide’s 39.9% EAR.
Deals end ‘but it’s not all bad news’
Springall said the summertime of free cash incentives on current accounts “fizzled out over recent weeks” but these changes were largely expected, as many of the free cash offers had a set window for consumers to take advantage.
But even though these incentives come and go throughout the year, for now, savers should still look at the alternatives on the market.
“It’s vital that customers choose an account based on its overall value, and not just for a free cash incentive”, she added.
