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29 Oct 2019

Revealed: the bank accounts thousands are switching to

Find out which banks have the most sought-after current accounts

Nationwide, HSBC, NatWest, Monzo and Starling Bank gained the most new current account customers between 1 April and 30 June 2019, according to new data from Bacs.

These providers have enticed people away from their old banks with perks such as switching bonuses, fee-free spending abroad and real-time apps.

At the other end of the spectrum, Halifax, Barclays and RBS suffered the biggest loss of bank account customers.

Here, we look at why people have been switching and explain how to move to a new bank or building society if you're tempted to follow suit.

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Which banks and building societies are we switching to?

The latest data from Bacs shows how many people moved to and from the main current account providers between 1 April and 30 June 2019.

Here is how the banks and building societies fared:

Nationwide was the biggest winner, with a net gain of 26,466 new current account customers in just three months. We also found that Nationwide came out on top overall in 2018.

Its appeal is likely to be down to the consistent perks it offers on its current accounts. The Nationwide FlexDirect account, for example, offers 5% AER interest on balances up to £2,500 for 12 months.

HSBC, which includes First Direct and M&S Bank, collectively brought in a net addition of 15,782 current account customers.

However, this success may not last, as both HSBC and First Direct recently slashed the rates of their popular regular saver accounts from 5% AER to 2.75% - which were a perk only available to current account holders.

First Direct also cut its cash switching bonus from £100 to £50 in July, which may affect how attractive its current account will be in future.

Halifax saw the biggest losses between April and June, with a net fall of 12,058 current account customers.

One explanation could be that the bank stopped offering a cash reward for switching in June of this year. Before this, new customers could gain £135 for opening a Halifax Reward or Ultimate Reward account, as long as you held it for six months.

TSB saw huge net losses last year as a result of its persistent banking glitches. While the provider still had a net loss of 8,110, it's not the mass exodus level it once was.

Challenger banks are on the rise

Of the seven banks who made positive net gains, two of them were mobile challenger banks.

Monzo - a Which? Recommended Provider - experienced a net gain of 13,453, whileStarling had a net gain of 6,686 customers.

Proclaimed as the 'hipster' banking options, due to their hi-tech interfaces and features, both accounts offer fee-free spending abroad and useful budgeting tools.

Monzo has also launched features such as loans, linked savings accounts and overdrafts. Its foray into packaged bank accounts earlier this year was rather short-lived, however; Monzo Plus was closed at the end of September after just a few months.

Are we swayed by switching bonuses?

Getting 'free' money for getting a new current account is certainly tempting and is likely to be a major pull factor for many people when choosing a new bank account.

The banks currently offering cash switching bonuses include:

  • HSBC: £175 for Advance and Premier accounts
  • NatWest: £150
  • RBS: £150
  • Lloyds Bank: £125
  • First Direct: £50
  • M&S Bank: £100 gift card, plus an £80 gift card after a year

While these offers haven't been consistent - for instance, NatWest ran its switching offer from April to May and then opened it again in September - they do tally with the popularity for switching.

Both NatWest and HSBC - which also includes First Direct and M&S Bank - had significant net gains in customer switching.

But a cash incentive is not a guarantee. RBS was down 10,440 customers overall despite offering the same cash incentive as NatWest.

How to choose a current account

As long as everything works how it should, chances are you won't often think about your current account service very often. But you could be missing out on some great perks that you'd really benefit from.

Some banks have upped their switching incentives - NatWest and RSB both pay £150 to new and existing customers that switch to their current accounts and stay for a year, and HSBC pays out £175 if you switch to its Advance and Premier bank accounts.

But it's not all about the bonuses. Factors such as customer service, interest rates, and other loyalty perks are all important, too. Which? offers detailed reviews of bank accounts in our guide to the best and worst banks.

Depending on what kind of account you're after, our other guides can also help point you in the right direction:

Once you've decided which bank you want to switch to, you can just apply to open it online, over the phone or in-branch.

If the provider is part of the Current Account Switching Service (CASS), you'll be able to open the account in seven working days.