HSBC has brought back its switching bonus offer, giving new customers £175 when they move to the Advance or Premier current account.
The bonus is the highest amount of cash currently being offered for switching, as almost every other bank has pulled their switching sweetener.
However, with HSBC announcing it will hike overdraft charges to 39.9% EAR from March it’s worth taking extra care to make sure the bank is the right option for you.
Which? reveals what the HSBC current accounts offer, and what other switching incentives are on the market.
Should I switch to an HSBC current account?
The HSBC Advance Current Account offers exclusive access to a regular saver paying 2.75% AER for 12 months plus an arranged overdraft worth at least £1,000 which will cost 17.9% EAR – rising to 39.9% EAR from March.
To open an Advance account, you must be able to pay in at least £1,750 into the account each month – or at least £10,500 every six months. This can’t be transferred from another HSBC UK personal account. So if you plan to fund the account with your salary, you’d need to be earning at least £21,000 a year after tax to qualify.
The HSBC Premier Account offers customers free annual travel cover, preferential rates on products like mortgages and savings, access to Premier credit cards plus a fee-free overdraft of £500 (11.9% EAR on anything above this rising to 39.9% EAR from March 2020).
But to qualify for a Premier account, you’ll need to earn £75,000 a year and hold a qualifying HSBC UK mortgage, insurance or investment product. Alternatively, you can get the deal if you hold at least £50,000 in an HSBC UK savings or investment account within six months of opening your account, or qualify for an international Premier account.
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How to qualify for the HSBC bonus
To qualify for the HSBC £175 switching bonus you need to:
- be a new customer (this counts as someone who hasn’t held an HSBC current account since 1 January 2017)
- switch to one of the qualifying accounts using the Current Account Switch Service (CASS) within 30 days
- move at least two direct debits or standing orders
- register for mobile/online banking
If you fulfil all of the criteria, you should receive the full £175 payment within 30 days of switching.
HSBC hasn’t revealed an end date for this offer but states it could be withdrawn at any time in its terms and conditions.
- Find out more: how to switch your bank account
What other switching offers are out there?
There are very few switching incentives on the market right now.
HSBC has a separate £75 switching offer for those who open its HSBC Bank Account. Unlike the other accounts, there’s no minimum earnings or savings requirement – you just need to be at least 18-years-old, have an EU residential address and be able to provide certified proof of your identity.
Elsewhere, First Direct is offering a £100 bonus to new customers. To qualify, you can’t have held a First Direct account before, have to switch using CASS, and must pay in at least £1,000 within three months of opening the account.
The bonus will be paid within 28 days of all criteria being met.
Refer a friend bonuses
The only other bonuses come from recommending a friend.
TSB has recently increased its refer a friend bonus, up from £75 to £100 for each person who signs up – and your friend gets £100, too.
To refer a friend, there’s a form on TSB’s website that you’ll need to fill in, which will generate a unique link that your friend will need to use when they sign up.
Existing customers can earn up to £500 per tax year, as long as your friend applies for a TSB Classic or Classic Plus account using CASS. The payment is made 28 days after the switch has been completed, as long as they have at least two direct debits being paid out of the account, and pay in at least £500.
This increased bonus is available until 28 February 2020.
Similarly, Nationwide is offering £100 for customers who hold one of its current accounts, savings accounts or mortgages and get a friend to switch to a Nationwide FlexAccount, FlexDirect or FlexPlus account – and the friend gets a £100 bonus, too. Existing customers can earn up to £500 a year.
However, bear in mind that the bonus can be revoked if the recommended friend closes their account ‘without good reason’ within three months.
The best bank accounts to switch to
When it comes to choosing a current account, a switching bonus can be a nice cherry on the cake – but it shouldn’t be the only thing you consider.
High-interest current accounts are good for making your cash work harder, as it will grow without having to be locked away in a savings account.
The Nationwide FlexDirect account offers the highest rate at the moment, at 5% AER. This is paid on balances up to £2,500 for the first 12 months, after which time the rate falls to 1% AER.
To qualify, you must pay in at least £1,000 a month.
Elsewhere, TSB’s Classic Plus account pays 3% AER on balances up to £1,500 as long as you pay in at least £500 a month and register for paperless statements and internet banking.
- Find out more: best high-interest bank accounts
If you use your current account for everyday spending, a cashback account will reward you when you shop.
The Barclays Blue Rewards account pays up to £7 a month in cashback for general spending. You can get extra for shopping online through partners such as Clarks, Debenhams and Gap, and if you get selected Barclays mortgages and insurance products.
However, Barclays Blue Rewards costs £4 a month, requires a minimum pay-in of £800 a month, and you’ll need to set up at least two direct debits to be paid out of the account.
- Find out more: best bank accounts for cashback
Accounts for bad credit
If you have a bad credit score and want a fee-free account, you could consider a basic bank account. These kinds of accounts don’t have overdraft facilities, but will still let you set up direct debits and standing orders, offer a debit card and won’t charge fees for failed payments.
Nationwide’s FlexBasic account is available to those who have been declared bankrupt and/or have a poor credit history. It has a £500 ATM limit and can be opened online, in branch or over the phone.
It’s also the only account in our table that doesn’t charge a fee to make a payment via Chaps, which can commonly cost between £25 and £30.
- Find out more: best basic bank accounts