Christmas is a joy for kids, but a pain for purses. Yet if you’re very quick, you may be able to make up to £175 free cash in time for Christmas, but more likely to clear the Christmas bills in January – and while you’re at it you’re likely get a better bank account thrown in.
This is all about switching bank accounts.
Switching only takes seven working days. Then with three of these accounts that pay you – they promise to pay the bonus within a month of that. Overall that’s a maximum of 40 days. So at the very worse the money will be in your account to help with the January squeeze – which for most people means you have to deal with a longer gap between paydays than normal.
The top accounts giving free cash.
For the full rundown of all the options and eligibility criteria see www.moneysavingexpert.com/bankaccounts, but in brief…
- Free £175 + 2.75% regular savings.Switch to hsbc.co.uk Advance account and you can get £175 free cash. It also lets you save up to £250 per month in its linked 2.75% AER fixed regular savings account. Its minimum monthly pay in is a relatively large £1,750 per month (equivalent to £25,900 salary), and you also need to have at least two direct debits/standing orders switched over.
- Free £100 M&S gift card without paying anything in, plus possible £80 gift card.
Switch to marksandspencer.com and you get a £100 M&S gift card even if you don’t pay anything in, though you do need to switch minimum four direct debits.Plus if you can pay in £1,250/mth (equal to £17,000/yr salary), keep at least four direct debits active, and register for online banking and statements, you can earn an additional £80 gift card in 12 months time (perfect for next Christmas).
You can also save up to £250 a month in its 2.75% AER fixed regular savings. Its customer service rating is good too – at 68% great.
- Free £50 but also top service. Switch to firstdirect.com and pay in £1,000 within 3 months and you’ll get £50 cash bonus. Though it’s the smallest cash amount, if you want a bank with top service 85% rated it great in my last poll. You’ll also get a £250 0% overdraft, and can open a linked 2.75% AER regular saver.
What do you need to do to switch?
To get the free cash, first there are a few things needed to qualify. You’ll need to:
- Pass a not so harsh credit check
- Use the banks’ official switching services to get the free cash
- For some accounts pay in a minimum monthly pay-in to get the cash – don’t worry, it’s just to get you to pay in your salary. And a tip: if you don’t meet the minimum pay in, you can always withdraw some cash and pay it in again the next day to make it up to the total.
Switching is very easy, in my last twitter poll on it, 76% of you said switching was hassle-free and easy.
Yet if people are telling you their bank switching nightmares, ask when they did it, often they’re old financial war stories. For the past six years we’ve had the switching guarantee in place which has made things far easier.
In seven working days your new bank moves all your money across, and any payments in and out (including direct debits and standing orders) moves from your old bank to the new one. Your old account then closes. You also get added protection where payments made to your old bank are auto-forwarded for at least three years.
Those overdrawn can get the money too.
If you’re overdrawn don’t think you can’t switch to another account; you can. But you may just not get the same overdraft limit as your current account. For full overdraft help see www.mse.me/overdrafts.
If you’re only just in your overdraft, use the free cash to clear it, but if you often go into the red, focus on cutting overdraft costs instead. The First Direct deal above gives many a £250 0% overdraft as well as the £50 – a useful buffer if you slip over (you pay interest at 15.9% EAR variable above £250).
Alternatively, www.nationwide.co.uk FlexDirect account gives a year’s 0% overdraft but no free cash. Yet there’s no set limit – it depends on a credit check. If you get it, use the year to clear the overdraft as after you’re charged a big 39.9% APR interest with no buffer after.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip