HSBC launches £125 switching bonus: should you get a new current account?

HSBC has reintroduced its popular £125 bonus for new customers who switch to its Advance and Premier current accounts - but there are quite a few caveats.

This comes after the latest Current Account Switching Service (CASS) figures showed almost 21,000 customers left the provider between July and September 2020.

In October 2020, HSBC announced it could start charging for current accounts after a fall in profits, which could have encouraged more customers to go elsewhere.

Here, Which? reveals what you need to do to qualify for the switching bonus, and look into what other incentives are on offer.

How to get the HSBC switching bonus

There are a number of caveats to getting the HSBC switching bonus - as well as eligibility criteria for opening the two current accounts it's being paid on.

To secure the £125 bonus, you must:

• open an HSBC Advance or HSBC Premier Bank Account as a new customer. This means you can't have held an account with HSBC, First Direct or M&S Bank since 1 January 2018
• complete a full switch using the Current Account Switching Service within 30 days
• the switch must include transferring over at least two direct debits or standing orders
• still hold the HSBC bank account when the £125 is paid, which should be within 30 days of completing the switch.

The bonus will be paid in one go, into your HSBC current account.

If you open a joint account, you'll only get one bonus between the two of you.

Eligible accounts: are they any good?

The only accounts you can get the switching bonus on are the HSBC Advance Bank Account and HSBC Premier Bank Account. Both have restrictions as to who can open them, but also come with a number of other perks.

The HSBC Advance Account requires you to pay in at least £1,750 each month, or £10,500 every six months. You'll also need to qualify for a minimum £1,000 arranged overdraft, which means a credit check will need to be carried out when you apply.

The account is free and comes with some perks, which include:

• fee-free international money transfers
• help setting up accounts abroad
• up to £500 daily cash withdrawals
• up to £10,000 emergency cash sent to any HSBC branch if you lose your card (as long as you have the funds in your account)
• able to open the HSBC Regular Saver account, paying 1% AER
• offers from HSBC Home&Away.

The HSBC Premier Account is more exclusive; you either need to earn £75,000 a year and hold an HSBC mortgage, insurance or investment product, or hold at least £50,000 in an HSBC savings or investment account within six months of opening the account, or hold or qualify for an international Premier account.

Perks of the account include:

• free annual worldwide travel insurance, including winter sports cover for you, your partner, children and grandchildren from Aviva
• first £500 of your overdraft is interest-free
• fee-free international transfers
• preferential mortgage and savings rates
• exclusive credit cards
• access to HSBC Premier financial advice.

Are any other switching bonuses available?

No other banks are offering money to switch, but new Virgin Money current account customers can still get a free box of Virgin Wines.

You can get a 15-bottle case of wine worth £180 (or non-alcoholic wine worth £75) if you make a full switch with at least two direct debits and register for the mobile banking app.

You'll also need to add £1,000 to the linked savings account, and keep the money there until you receive your Virgin Wines code (you should get this within 31 days of fulfilling the rest of the criteria).

This offer is due to end at midnight on Sunday (14 February).

Other bank account perks to consider

While getting 'free' money is a quick and easy perk, there are a number of other ways your bank account can give you a little bit extra.

For instance, you can get money back on what you spend with a cashback account. Santander's 123 account allows you to earn up to £15 in cashback every month if you pay certain household bills and Santander financial products from your account. However, the account costs £5 a month, so make sure you're spending enough to make the monthly fee worth it.

You could also opt for a high-interest bank account. The Virgin Money we mentioned earlier offers 2.02% AER interest on balances up to £1,000 and doesn't require a minimum amount of monthly funding.

The Nationwide FlexDirect account pays 2% AER on balances up to £1,500 for the first year (after which point the interest falls to 0.25% AER), but you need to pay in at least £1,000 a month.

Finally, if you want added extras like the HSBC Premier Account offers, you might be interested in a packaged bank account. Nationwide's FlexPlus account costs £156 a year (£13 a month) and includes £180-worth of travel insurance, car breakdown cover and mobile phone insurance. It also pays 3% AER on balances up to £2,500.

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Should you switch to a new current account?

You're likely to interact with your current account far more than, say, a savings account, so you need to be sure that it suits you before you make the switch.

You should check to see whether you'll be able to manage the account in the way that suits you - some are app-only, while others offer phone and branch access.

It's also worth checking the provider's customer service record in case you run into any problems, as well as whether it's signed up to the APP code to protect you from fraud.

• Find out more:how to switch your bank account