Martin Lewis – Bank Accounts

Fancy some free cash? Well, those generous bowler hatted ladies and gents at your bank are giving it away. Quite literally, they will to pay you up to £150 to switch bank account

– and, as it can also improve the service and features, grab it.

The bank account switching market is red hot, with many banks willing to pay for your custom.

Here are the 10 need-to-knows.

Q. You’re talking about switching, but I’ve heard all types of horror stories?
Martin’s A: Much of that is a legacy opinion from a few years ago. We’ve just celebrated the second birthday of what’s called ‘seven-day switching’, and that’s made the process easier. I did a poll of 100s of people on my Facebook page who’d tried it and 82% said they found it ‘easy and hassle-free’, while only 4% experienced problems.

In practice, when you apply for a new bank account, assuming you’re accepted, three things happen within seven working days:

1. All standing orders and direct debits are moved for you.
2. Your old account is closed.
3. All payments to your old account are auto-forwarded for three years.

Yet still far too few people try it – last year only 2% changed bank accounts – strange as my mailbag is full of people complaining about their banks. So my message is stop bitching and start switching.

Q. OK, so it’s easy, but what’s this about free money?
Martin’s A: Many of the challenger banks (those who want to break the dominance of the old ones) want you to switch to them so much they’re willing to pay you to do it.

There’s a full rundown and eligibility criteria at But, in brief, here are the current top picks:

– gives switchers a free £100 (or more via some websites) – cash comes within 28 days of switching and paying in £1,000.

Other benefits: It’s won every customer service poll I’ve ever run, 92% rate it great, it has a linked 6% regular saver, 0% overdraft up to £250.

– gives a free £100 within three working days of switching.

Other benefits: Pays £5 each month as long as you’re in credit.

– The current account gives a free £100 M&S gift card (or more via some websites), within a month of switching.

Other benefits: Unlike other accounts, you don’t have to pay in a set monthly amount (see next question) linked 6% regular saver, 0% overdraft up to £100.

Q. Can anyone get these?
Martin’s A: You’ll be credit scored to get these. Though most people who have an existing bank account should be fine (unless it’s a basic account).

Yet to get the bonuses, you normally need to use their switching service and have a couple of direct debits or standing orders set up. Plus with First Direct, you must meet a minimum pay-in requirement, equivalent of £13,200 a year – effectively a way of requiring you to earn a set amount.

If you have irregular income, M&S is the only one not to demand this.

Q. Aren’t there also accounts that pay high interest on your savings? Martin’s A: Yes that’s another form of competition, and if you have higher savings, that is likely to be more lucrative in the long run than grabbing the switchers bonuses.

The big one is the 123 account – it pays up to 3% cashback on certain household bills and up to 3% AER interest if you have between £3,000 – £20,000 in it. Its £24 a year fee is rising to £60 in January, yet if you’ve got over £5,000 savings and earn some cashback, it’s still likely you’re winner (full analysis of if it’s worth it in my blog)

If you’ve less, the Club Lloyds pays 4% AER interest if you’ve £4,000 to £5,000 in it and both and pay 5%, but only on up to £2,000 with TSB and £2,500 with Nationwide for the first year.

Q. Once I’ve switched and got the free bonus, can I switch again to another bank account?
Martin’s A: Yes, there’s nothing stopping you continually switching. But remember, you’ll be credit scored every time you open a bank account, so try to minimise opening too many accounts in a short space of time, especially if you’re going to be applying for credit in the near future, like a mortgage.

Q. I hate banks – are there any other options? Nationwide, as mentioned above, is a building society, so it’s owned by its members, and it’s got decent offers. Or see if your local credit union (a local savings and loans co-op) is one of 500 that offer bank accounts via ABCUL at

Q. I’m often in the red – can I switch to a 0% overdraft?
An overdraft’s a debt like any other, so if you often go into it, cutting its cost makes it easier to clear. has a £250 0% overdraft, and you can put the £125 it pays switchers towards clearing the overdraft too – a big boon. may give a bigger 0% overdraft, credit score depending, but only for a year. It’s 50p/day after, so aim to clear it before then.

Q. What if I can’t get a bank account?
Sadly, more than a million people in the UK don’t have a bank account.
For all the top pick deals above, you’ll need to pass a credit score.

Yet if that’s not going to happen, there is a way. As long as you’ve ID,
you should be able to get a no-frills, no-overdraft service, though you
need to ask the right way.

When applying, ask for the specific account by name – otherwise you
could get forms for standard accounts, then get rejected. The better
options include Cash Card and
Cashminder (not available to bankrupts).

Even though there’s no overdraft, they can still fine you if you try to
spend more than you’ve got, so you must manage it carefully.