High Street Banks – It Pays to Shop Around

Posted by on Nov 21, 2013 in Newsletters | No Comments

Lloyds Bank is the latest High Street bank to announce a cashback scheme for its’ current account holders with the launch later this month of Everyday Offers, a scheme that promises the ability to earn back up to 15% of what they spend at selected retailers.

Whilst the full details of the scheme have yet to be itemized, it is likely to be similar to the scheme that Halifax, who are part of the Lloyds Banking Group, has been running since August.  This scheme offers cashback payments of between 5% and 15% on purchases made using debit and credit cards at selected retailer partners that include Morrisons, Ocado, Homebase and Argos.

The Royal Bank of Scotland and NatWest have also recently launched similar cashback programmes and it is expected that the other High Street banks will follow suit in what is seemingly a response to the success of Santander’s 123 current account.

Traditionally in the United Kingdom, people have tended to show an innate sense of loyalty to their service providers.  However, as the escalation in domestic utility bills has highlighted, it pays to shop around.

Added to this, the Switching process itself has become quicker and more straightforward since September, with the Financial Services Authority requiring banks to switch current accounts within seven days rather than in the previous time-limit of a month.

Banks are actively seeking new current account customers with Halifax and First Direct offering £100 cashback to account switchers and Nationwide and Santander offering marketing-leading interest rates on current account balances between £1 and £2,500 and between £3,000 and £20,000 respectively.

Last week Santander announced that until 31st January 2014 new and existing Santander 123 Cashback credit card holders would earn 1% cashback on all spending at Amazon.co.uk and LoveFilm when using the card on the retailer’s UK website.

However, when considering switching personal bank account, it is critical to read beyond the headline offers and invest the time to find the best option for an individual circumstance.

For instance, the Santander’s 123 current account is not a free bank account as there is a £2 monthly account fee and account holders are committed to paying in at least £500 a month and to set up a minimum of two Direct Debits.

On the flip side, Santander, along with Nationwide, are offering a time-limited 0% overdraft facility to switchers.

All-in-all, it is hard to imagine that there been a better time to get more from a personal current account.