Three in four Britons have never switched their current account, but there are huge cash rewards to be snapped up by switching bank.
You could add an extra £1,030 to your savings pot by bagging each of the bank switching bonuses currently available from five banks.
First Direct, Nationwide, Lloyds, NatWest and Santander are each offering between £150 and £200 in a bank switching rush before Christmas.
But for some, this is nothing new. There is a whole community of savvy savers who cottoned on to this game some time ago, and max out bank switching bonuses as a way to get free cash.
Felix Johnson, 23, from London, is one of them. He told This is Money that between October 2023 and April this year, he made more than £1,100 in just six months by switching bank account six times.
Each of the banks were also offering cash bungs ranging from £150 to £200 at the time.
Felix (left) used an app called Switch Tracker (top right) to collect £1,100 worth of bonuses
Felix said: ‘I started my first switch in October 2023 and then went on from there to collect all the bonuses that were available at the time.
‘I didn’t set out to do this with any particular saving goal in mind, but I was planning on moving house so I used the switching cash to furnish my new home and to put money towards the deposit.’
Felix said he did this with the help of an app called Switch Tracker.
He said: ‘I wasn’t aware of how lucrative bank switching could be until I used this app – it’s basically free money.
‘I downloaded it and notifications would pop up when a bank had launched a switching bonus and how much it was offering.
‘It also told me how much I could stand to make I collected all the switching bonuses available.’
The Switch Tracker app was founded by software engineer Tim Harrison in May 2023.
Since launching, it has helped users collect almost £3million in switching bonuses and has been downloaded 25,000 times through the App Store and Google Play, Harrison tells This is Money.
The app works in the same way as keeping a checklist in the notes app on your phone (or a good old fashioned notebook) of which steps need to be completed and how far along someone is in the process of a switch.
It notifies users when a new switching offer goes live and any outlines any hoops you need to jump through in order to get it.
Most banks require new customers to have two or more active direct debits to transfer as part of the switch.
If they don’t already have these, Switch Tracker allows users to set up a £1 direct debit which can be cancelled after the switch is made. As the app is free to use, this is the only money it makes.
This part is completely optional and users can set up their preferred direct debit in any way they like.
Users cannot complete a bank switch through the Switch Tracker app and still need to use the Current Account Switch Service (Cass) and the mobile app or online site of bank they want to switch to.
Harrison said: ‘There is a community of very motivated switchers out there who are active in personal finance forums online. I wanted to help make it easier for people to take advantage of switching bonuses.
‘Some switchers have earned much more than £1,000 in total, because bank switching has been going on for years now. Many people have done every offer, for every bank, going back several years.’
Switch Tracker app alerts users when a switching deal launches – and how to get it
In the last 12 months 1.3 million bank switches have taken place, according to the Cass.
Banks offering cash for switching have the edge when it comes to getting customers to use them as their main bank account, but this is also a condition of receiving the switching cash.
Most banks require switching customers to deposit at least £1,000 in their newly-opened bank account, use their debit card at least twice and log into mobile banking to get the cash.
Felix said banks which don’t offer any cash bonuses for switching, for example Monzo and Starling, don’t appeal to him as much to use as his main bank.
One word of warning when it comes to the avidly collecting switching bonuses – it might affect your credit score.
Felix said: ‘My credit score took a bit of a hit due to switching bank six times in as many months, but I use a credit card which helps boost your credit score.’
Banks will perform a credit search before allowing you to open an account. The impact of these can last for up to six months on your file and affect your rating.
Some financial firms begin to worry when they see lots of credit searches, as it looks like you may be in need of money, so this pushes your score down.
Switching banks repeatedly is therefore not advisable if you are about to take out a mortgage or other loan.
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