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Halifax to slash current account bonus

Which banks offer the best switching incentives?
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Halifax is cutting its switching bonus by a quarter in March

Halifax is cutting the bonus it pays people who switch to its current account by a quarter, falling from £100 to £75.

The bank cited the ‘current economic climate’ as one of the reasons for the reduction, which takes effect from 1 March.

Some banks pay bonuses to new customers using the Current Account Switching Service, which helps you transfer to a new bank or building society in seven working days.

Other banks have recently cut rewards for current account holders, with Santander reducing the headline interest rate on its 123 account from 3% to 1.5%.  

TSB cut the interest on its Classic Plus account from 5% on up to £2,000 to 3% on up to £1,500, and Lloyds Bank cut interest on the Club Lloyds account to 2% from 5% on balances up to £5,000.

Customers with the Halifax Reward Current Account can still earn an additional £3 per month, provided they pay in £750 per month, stay in credit and set up two direct debits. This has also been cut from £5 per month.

Banks and building societies with the biggest bonuses

With Halifax becoming the latest bank account provider to slash its rewards, which companies still offer the best switching bonuses?

HSBC pays up to £200 to switch

If you switch to HSBC’s Advance account using the switching service, you’ll get a massive £150 bonus.

You need to set up two direct debits within 30 days of opening the account, and pay in a minimum of £1,750 per month.

You’ll also earn an extra £50 after 12 months, although you need to register for online or mobile banking within 60 days of opening the account to qualify.

In our last customer satisfaction score, HSBC finished second from bottom, with a customer score of 56%.

Find out more: Best and worst banks – how does your provider rank

M&S rewards you with £170 in gift vouchers

M&S Bank wants you to keep it in the family with its bonus scheme. Open its Current Account or Premium Current Account through the switching service and you’ll get a £50 M&S voucher.

Pay in £1,000 a month and set up two direct debits and you’ll get £5 a month in vouchers for the first 24 months you hold the account open.

The Premium account, which costs £10 per month, also gives you more than £200 in vouchers to spend on clothing, drinks and other M&S treats.

M&S scored 65% in our customer satisfaction score, around about the average for all banks rated.

Find out more: Best bank accounts if you stay in credit – see our top accounts

Get £176 from the Co-op Bank

The Co-op Bank will send £110 your way for using the switching service to join it, but that’s not all.

Pay in £800 per month, stay in credit or within your overdraft limit, pay in four direct debits a month, log-in online once a month and opt in for paperless statements and you’ll earn an additional £4 per month.

Once you’ve done all that, you’ll get an extra 5p every time you use your debit card, up to a maximum of £1.50 per month (which works out to 30 times a month).

There’s a few hoops to jump through, but it means you could earn a total of £176 in your first year.

The Co-op Bank has a customer score of 69%, the fourth highest in our table.

Find out more: The best banks for overdrafts – who’s the cheapest to borrow from

Limited offer to get as much as £165 from TSB

While TSB has cut the interest it pays on its Classic Plus account, it has partnered with MoneySavingExpert.com to offer a time-limited bonus for switching. 

You can earn £125 by using the switching service to open an account via www.tsb.co.uk/cashback-money-saving-expert. This is a limited-time deal, so you need to apply for the account by 27 February and complete your switch by 31 March.

You also need to switch at least two direct debits and pay in £500 in the first 28 days of opening the account to qualify. 

TSB also pays 5% cashback on the first £100 contactless card, Apple Pay or Android Pay spending each month, until the end of September 2017. That means you could earn another £40 in cashback, if you apply soon enough. 

TSB comes third in our customer satisfaction survey, with a score of 71%. 

Find out more: Best packaged accounts – discover the paid-for accounts with perks

Switch to First Direct for £100

If you use the seven-day switching service to move your banking over to First Direct – the online and telephone bank – you’ll get £100.

All you need to do is pay in at least £1,000 within the first three months of opening the account.

The account usually charges £10, which is waived for the first six months. You can avoid this fee altogether, by paying in £1,000 per month, maintaining an £1,000 balance or holding another First Direct product.

First Direct is the top of our customer satisfaction tables, scoring a mighty 85% – 10 percentage points higher than its nearest rival, Nationwide. Both banks are Which? Recommended Providers

More on this

This story was updated on 1st February to reflect the switching bonus deal offered by TSB.