TSB has introduced a £100 cash incentive for customers who switch to its Classic Plus account using comparison site MoneySupermarket.
Switchers can now earn a maximum of £195 from the account in the first year, making it a competitive option for those looking to maximise current account returns.
How do I get the deal?
To claim the £100 switching incentive, you must:
- switch to the account through MoneySupermarket.com
- apply to switch by 11 December, and complete the switch by 30 December
- set up two direct debits and pay in £500 within 28 days of switching.
To earn an extra £95 from cashback and interest, customers should keep their balance above £1,500 and spend at least £100 on contactless payments each month. This will earn them £45 interest over the year, plus an extra £5 per month cashback until September 2017. To be eligible for cashback, you must sign up for online banking and paperless billing.
How does the deal compare?
The announcement comes three weeks after TSB announced it would cut the account’s interest rate from 5% on balances up to £2,000 to 3% on balances up to £1,500. This change takes effect on January 4.
Nevertheless, for most customers, the maximum first-year return is only beaten by Co-Op Bank’s current account which will pay switchers £216 in total: £150 for switching, plus an additional £5.50 per month if they sign up for Co-operative Bank Everyday Rewards.
You’ll have to be quick to take advantage of this deal though, as the switching incentive is only available until 11 November.
As the graph below shows, customers can only beat Co-Op’s £216 return if they use Santander’s 123 current account – but they’ll need a balance greater than £18,333.
The graph shows the maximum annual returns available after Santander’s £5 monthly fee is subtracted. It does not factor in that Santander 123 customers can receive up to 3% cashback on monthly bills, which may make the account worthwhile to customers with lower balances than £18,333.
In terms of non-cash rewards, there’s also up to £220 in M&S vouchers up for grabs at M&S Bank. If you switch to its current account, you’ll get a £100 gift card and this will be topped up by an extra £10 for every month you stay, for up to 12 months. The account also offers access to a regular savings account which pays 5% interest for 12 months.
For more information on the rewards available to current account switchers, read our guide to the best current accounts for cashback and other rewards.
There are still some high-interest current accounts available including a generous 5% on balances up to £2,500 from Nationwide Building Society, although this drops to 1% after the first year. We list the best bank accounts for in-credit interest in our comparison tables.
If you’re looking for a bank account with extra benefits such as travel insurance or car breakdown cover, see our online tables to compare the best packaged bank accounts.
All current accounts require customers to adhere to certain terms in order to qualify for interest and bonuses, so it’s always worth checking you can meet these before you switch.
A tough year for current account savers
The £195 first-year return from TSB might seem competitive, but it’s much less than what you could’ve earned from high-interest current accounts this time last year.
Before Santander cut the maximum interest on its 123 account from 3% to 1.5% on balances up to £20,000, those using the account could have earned a maximum of £576 a year, even before the 3% cashback on household bills. The graph compares some of the maximum returns customers could get back in January 2016, with what they’ll be getting in January 2017.