- The Current Account Switch Guarantee was launched by the government in 2013 to make it easy for the customers to switch their current accounts and to increase competition between banks.
- After Lloyds bank announced £100 for switching their current account provider, HSBC UK joined the battle to persuade customers by offering £110.
- Earlier, Nationwide had announced that to offer £125 to its existing customers and £100 to new customers for moving over.
The major banks in the UK are competing with each other to attract customers by offering cash initiatives for switching their current account provider. Banks are also doing their best to retain their existing customers, which has increased the choices of great deals for the customers. HSBC Holdings Plc has re-started its current account switch programme today.
The Current Account Switch Guarantee was launched by the government in 2013 to make it easy for the customers to switch their current accounts and to increase competition between banks as the current account market in the UK were dominated by only four major banks that include HSBC, Barclays, The Royal Bank of Scotland Group and Lloyds Banking Group.
According to the Current Account Switch Service, since 2013, over 6 million current accounts have been switched and over 40 banks, and building societies are already part of the switch services.
The Current Account Switch Guarantee provides an easy, reliable and stress-free way to switch current accounts. The customer’s new bank is responsible for switching the payments and transfers the account balance, and their old bank’s responsibility is to close the customer’s old account.
Advantages of the current account switch service
According to a survey by MoneySuperMarket, the most popular reason to switch current accounts is to get the higher interest rates, cashback, rewards, overdraft facilities, better customer services and other benefits.
Before the Current Account switch services, it was a complicated process to change bank accounts, but now it takes only 7 days, which is known as the 7-day switch. The customers only need current bank account detail and have to complete a current account switch agreement.
Once the customer confirms the switching date of their choice, their new bank they have opted for, informs that their switching process has been started, at least 7 working days prior to the date agreed and finally, all the inward and outward payments gets switched to the customer’s new account.
In case, any error with the switch account, the customer’s new bank or building society will make the refund.
HSBC launches new £110 bank switch offer
With the growing choice of cash incentive to switch current accounts, another major bank, HSBC UK, announced that its current account switch offer is back, and the offer will be available from Monday.
The bank will be offering customers £110 in cash to customers for switching their current account to an Advance or premier Account, with an additional £30 to eat out using the Dining out Gift Card or eat in using Uber Eats, which is valid for six months after the account opens.
HSBC UK’s head of everyday banking, Fiona Anderson said that if the customer may wait longer, they can use the offer to celebrate Christmas.
The decision of HSBC Holdings Plc (LON: HSBA) came after Lloyds Banking Group Plc (LON:LLOY) announced a new offer of £100 in cash to persuade the customer to switch to its club Lloyds current account last week.
HSBC Holdings Plc was trading at GBX 378.45, up by 0.79 per cent at 13:39 PM on 13 September 2021.
Lloyds’ current account switch
Lloyds Banking Group Plc said if the customer switches their current account to a new Club Lloyds current account, which costs £3 a month or a new Club Lloyds Platinum account, which costs £21 a month, they will have a range of benefits such as worldwide travel insurance and other insurance benefits within seven days, also they will receive the cash benefit within 10 days.
The new Club Lloyds current account has no maintenance fee as long as the account holder pays £1,500 every month, and if they pay less than the required amount, they will be charged £3 every month.
Customers holding Club Lloyds accounts can also potentially earn interest of 0.6% on sums up to £4,000 and 1.5% on any part of the balance between £4,000 and £5,000. If the account holder maintains a £5,000 balance, it will worth just £39 every year.
The account offers various rewards such as cashback, cinema tickets, and annual subscriptions to a popular magazine, and it also offers three-month fee-free arranged overdraft. However, the bank said that the switching offer might be withdrawn at any time without notice.
Lloyds Banking Group Plc was trading at GBX 43.53, up by 2.26 per cent at 13:41 PM on 13 September 2021.
Nationwide Building Society’s Flex Instant saving account
In August, Nationwide Building Society (LON: NBS) also announced its entry in the battle to persuade customers to change their current account provider to Nationwide, by offering £125 to its existing customers and £100 to new customers for moving over.
Nationwide had launched a Flex Instant saving account that will pay an interest of 0.35% annually, exclusively available to current account members.
Nationwide Building Society was trading flat at GBX 164.00 at 13:43 PM on 13 September 2021.
The customers were reluctant to switch their bank accounts provider during the pandemic. However, as situations have started to return to normal, various banks are offering high cash incentives to encourage customers to switch their account providers.