Fancy some free money? NatWest and Barclays offer cash carrots in bid to woo to current account switchers

By EMMA GUNN FOR THISISMONEY.CO.UK

Updated:

Cash incentives designed to reel in new current account customers were all the rage for a while but had been dying out recently. Now two banks have upped the stakes again. 

Barclays and NatWest have both launched tempting cash incentives for new customers opening a current account.

NatWest has brought back its current account bonus of £125 for new customers, while Barclays is doubling potential earnings with its Blue Rewards feature for a year – earning switchers up to £306.

But are either worth upping sticks for and what hoops do you have to jump through? We take a look.

Golden Carrot: Which bank offers the best cash incentive to draw in customers?

Golden Carrot: Which bank offers the best cash incentive to draw in customers?

What is NatWest offering?

NatWest is fairly new to sign-up bonuses. The bank steered clear of them for just under a decade, before jumping back in earlier this year with a temporary £125 offer.

The high-street giant's latest cash incentive is simple, it gives £125 cash if you open and switch your main account to its either its Select, Reward, Reward Silver, Reward Platinum or Reward Black account.

Its Reward Account is one of This is Money’s top picks, as it pays 2 per cent cashback on bills, worth an average £83 per year.

The account comes with a £2 monthly fee, but average earnings would total £184 in the first year and £59 after that.

To earn the cash incentive you must switch using the Current Account Switch Service by 3 December 2018 and pay in £1,500 and log in to online or mobile banking before 7 January 2019.

What is Barclays offering?

Barclays uses its Blue Rewards feature, an add-on you can apply to its bank account and premier accounts, to beef up its switching appeal.

It claims an eye-catching possible £306 in the first year, but to get that you need to also have a Barclays mortgage and home insurance policy. 

For £3 per month it offers cash loyalty rewards typically worth up to £15 per month. You earn £7 per month for having two active direct debits from your account, £5 per month if you have a mortgage with the bank and £3 for home insurance.

The switcher offer doubles this for the first year. 

Realistically most people won't be eligible for the full £306 but just holding the current account still proves lucrative with the offer. 

Minus the monthly fee, switchers would earn £132 in the first year from Blue Rewards, after that it’s worth £48 per year.

The bank also has a cashback feature that offers 1 per cent (2 per cent in year one) when you shop with certain retailers signed up to its scheme.

To be eligible you must open a Barclays account before November 14 using the CASS. You must also sign up Blue Rewards which requires a monthly minimum deposit of £800.

Existing customers can take advantage too, but only if they can also use the CASS to switch another account to Barclays.

Can they be beaten?

Currently HSBC is offering the largest golden hello to new Advance Account customers at £200. You get £150 to switch and then an extra £50 after a year, plus it offers a fee-free overdraft for a year.

To be eligible you need to pay in at least £1,750 per month and have two active direct debits. 

First Direct revamped its switching incentive earlier this year, swapping a cash incentive for freebies. You can currently bag yourself anything from an Amazon Echo Spot or Bose headphones to £150 Expedia vouchers. 

The account is well worth considering as it also comes out top for customer service and its £250 fee-free overdraft buffer.   

M&S Bank instead chooses to reel customers in with £185 in vouchers over the course of the first year, including a £125 gift card to sign up and a £5 monthly top up. It also has a decent overdraft buffer of £100 and offers loyalty points for spending. 

If it's monthly rewards you are after another alternative is Halifax's Reward Account , which pays a £75 cash bonus to sign up, and £3 in monthly rewards on top. In a year this amounts to £111.   

This is Money's verdict

Adding a cash incentive or boosting an existing one is a pretty popular and fairly transparent tactic used by most banks at least a couple of times a year to grab switchers' attention.

That said, if you are sensible and aware of the small print, switching banks can prove lucrative, as the deals above show.

Switching banks is always something This is Money recommends, as most of us let inertia get the better of us, sticking with the same bank for years, despite poor service.   

But before you take the leap make sure the account is right for you irrespective of the cash on offer.

Depending on what you use your account for and whether you keep a balance in it, you may earn more long-term with an account paying interest.  You can find out more about the top-paying current accounts for in credit interest here.

Check out our regularly updated guide, Five of the best Current Accounts for more on the top accounts and how to switch. 

When considering switching watch out particularly for overdraft fees and any restrictions such as minimum deposits.

For example, the Natwest account charges a £6 per month usage fee and 19.89 per cent interest on agreed overdrafts while Barclays charges flat fees of up to £3 per day. 

Read more about the best and worst current accounts for overdrafts.  

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