Battle for business sees banks launching ‘limited-time’ swaps

There are indications that more people may now be inlcined to switch banks
There are indications that more people may now be inlcined to switch banks

The battle to attract current account customers has heated up, with banks launching new “limited-time” offers.

The deals come at a time when people may be feeling particularly tempted to switch, with some having been affected by recent IT hitches or having seen the perks they receive with their current provider shrink.

NatWest announced on Wednesday that it is offering £125 to new and existing customers switching their main bank account. The offer runs until December 3.

Switchers could choose an account which does not come with a monthly fee or they could choose a reward account, which has monthly fees starting at £2 and enables people to earn rewards on monthly household bills.

NatWest said those switching to a reward current account could benefit from 2% rewards on their household bills with an average of £83 received each year - meaning switchers could receive £200-plus in total for moving.

On Monday, Barclays said customers who switch to it using the current account switch service before November 14 will get double Barclays blue rewards for 12 months, receiving up to £30 a month or £360 over the year.

To benefit from blue rewards, people need to have a suitable Barclays current account, have £800 paid into their account every month, have monthly direct debits and pay a monthly £3 fee.

Barclays blue rewards customers receive a “loyalty reward” for banking with it as well as additional cash rewards for holding certain other products with Barclays.

Earlier this year, First Direct, which regularly tops customer satisfaction surveys, replaced a cash offer to switch with a choice of gifts.

Some current account customers may be in the mood to move.

Many people trying to log into their accounts have been left frustrated by a string of IT problems in recent weeks, affecting providers including RBS/NatWest, Barclays, HSBC and TSB.

TSB also suffered a huge IT meltdown earlier this year, after a botched IT switch saw millions of customers locked out of accounts.

The new limited-time offers have also been launched in the same month that Halifax has reduced the monthly reward payment on its reward account from £3 to £2.

Rachel Springall, a finance expert at Moneyfacts.co.uk, said perhaps the latest cut from Halifax is making providers re-think their incentives in an attempt to attract those looking to switch.

She said there are other options for current account customers looking for cash from their bank account, for example: “The Co-operative Bank pays £4 net per month when customers meet certain eligibility criteria, plus up to £1.50 per month on top when using their debit card, which totals £66 in the first year.”