Over the past six months, banks have slashed their bank account rewards and switching deals, according to new data from Moneyfacts.
Most recently, banking giant Halifax has reduced the rewards it pays account holders, following a reduction in the switching deal it offers new customers.
Find out which bank accounts are becoming less rewarding and where you can still find a good deal.
Bank account rewards decline
Several banks have reduced the rewards and cashback they offer over the years. In 2017, NatWest reduced its cashback rewards from 3% to 2%.
In June this year, TSB axed its reward payment of £10 a month for its Classic Plus Account customers.
Account holders were able to earn £5 a month when they held two direct debits and a further £5 when they made at least 20 debit card transactions, within a month period.
Halifax Reward current account customers have seen the monthly cash reward paid into their accounts cut from the beginning of this month.
From October 1st, the account started paying a £2 cash reward, instead of a £3 cash reward. It follows another reduction back in February 2017, when the Halifax Reward current account paid a hefty reward of £5 a month to eligible account holders.
Halifax stated that the changed ensured they could continue to offer benefits across their current account range.
A Halifax spokesperson said: ‘The Reward current account remains fee free and this change ensures we can continue to offer all the benefits of these accounts while remaining competitive in the market.
‘The Ultimate Reward Current Account offers an extensive range of features and benefits including several insurance products. To purchase these individually would cost more than the monthly account fee.
‘Qualifying new customers will still benefit from our £75 to switch offer, in the same way as today. Halifax Reward and Halifax Ultimate Reward Current Account customers can also earn up to 15% cashback on purchases from a range of retailers each month through Cashback Extras.’
- Find out more: best bank accounts for cashback
Do bank accounts still pay?
A number of bank accounts on the market still offer current account rewards. This could include anything from monthly cash payments to cashback schemes.
Barclays Blue Rewards scheme, for example, offers account holders up to £7 a month.
To qualify for the account you’ll need to pay in a minimum of £800 into an account, set up two direct debits and pay a monthly fee of £3.
The Barclays Blue Rewards scheme works on a sliding scale, meaning that the more financial products you hold with them, such as a loan, mortgage or home insurance, the more rewards you get in return. You could also earn an additional 1% cashback at more than 150 retailers when shopping through online banking or using the Barclays cashback deals on offer.
The table below shows the current accounts still offering eligible customers rewards.
|Barclays||Barclays Blue Rewards Account||£7 monthly cash (minus a £3 account fee = £4), £5 a month mortgage reward, up to £3 a month insurance reward.|
|Halifax||Halifax Reward Account||£2 monthly cash (previously £3), 15% cashback at selected partners|
|NatWest||NatWest Reward Current Account||2% cashback on utility direct debits (previously 3%)|
|Santander||Santander 123 Lite||Up to 3% cashback on selected household bills|
|The Co-operative Bank||The Co-operative Bank Current Account||£4 monthly cash, up to £1.50 for debit card spending|
- Find out more: best bank accounts if you always stay in credit
What about current account switching deals?
Over the last few years, we’ve seen a number of banks roll back their incentives including how much they offer you to switch accounts.
The Co-operative Bank and Yorkshire Bank, for example, used to offer new customers £150 to switch but have now dispensed with their deals. TSB used to offer new customers a £100 switching incentive.
In a surprise move in May this year, First Direct axed its popular £100 switching bonus for new customers. The bank now offers a range of gifts including tech, travel vouchers or online self-development courses.
Below we’ve rounded up the bank account switching deals on offer right now.
Switch to HSBC for £200
HSBC has brought back its £200 switching offer for new customers, currently the highest on amount of cash offered by banks.
The offer is available for people who switch to the HSBC Advance account. To qualify, you’ll need to pay in a minimum of £1,750 a month each month, for at least nine months a year – or £10,500 over six months.
You’ll also have to register for online and/or mobile banking.
After doing this you’ll get £160 within the first 30 days of opening the account and the final £50 after you’ve held it open for a full year.
Switch to NatWest for £125
From October 3rd to December 3rd, NatWest is offering new and existing customers £125 to switch.
The offer applied to the current account full range s including NatWest’s Reward, Select, Reward Silver, Reward Platinum and Reward Black accounts.
If you switch to the NatWest Reward current account, which has a monthly fee of £2, you’ll also get 2% cashback on your household bills.
Switch to Halifax for £75
Halifax is currently offering £75 as an incentive for new customers to switch to its Rewards or Ultimate Rewards accounts.
The Halifax Reward account pays you £2 a month (down from £3) when you pay in £750, have two direct debits set up and stay in credit, with no account fee.
You can also get up to 15% cashback on spending at selected retailers in-store and online.
The Ultimate Reward account offers perks including travel insurance, mobile phone insurance and breakdown cover for a monthly fee of £17 – up from £15 in July this year. If you’re considering this account, make sure that the perks are worth the additional annual cost.
Switch to M&S Bank for £185 in gift cards
M&S Bank is offering new customers M&S gift cards worth up to £185. You’ll receive a gift card worth £125 when you first sign up.
Then, for the first year after you switch, your gift card will be topped up with £5 a month when you pay a minimum of £1,000 a month into your account and set up two direct debits – for an additional bonus of £60.
Switch to First Direct for gifts and travel vouchers
New customers that switch to First Direct’s 1st account can choose from a range of ‘switcher gifts’.
These include online self-development courses, the latest technology and £150 worth of Expedia travel vouchers.
The 1st account, which comes with a £250 interest-free overdraft, must have £1,000 paid into it within the first three months to complete the switch.
- Find out more: how to switch your bank account
How to find the best bank account
While promotional offers and rewards can be appealing, when it comes to choosing a bank account, they shouldn’t be the only factors you look at.
It’s important that you select a bank account that suits your financial needs, rather than simply going for the largest cash reward or switching incentive.
Shopping around is key to helping you see what’s on offer, compare different deals and pick out the best bank accounts.
Another thing to bear in mind is the quality of customer service that banks offer, to ensure that your banking experience runs smoothly and you could get the best possible help when you need it.
For more tips on finding the right bank account, check out our reviews of the best and worst banks.
Updated 15/10/2018 at 14:40