How far will the banks go to entice new customers?

Nationwide is offering a cash incentive for switching current accounts. Chiara Cavaglieri reports

Nationwide is the latest bank hoping to draw in customers by offering a short-term, £75 switching incentive. The offer expires on 5 March, but how does the Nationwide FlexAccount compare with the other big current account players on the market?

In purely financial terms, the building society's cashback incentive is not the most generous around – Alliance & Leicester's (A&L) Premier Account and First Direct's 1st Account offer a £100 switching incentive – although the A&L offer is due to end on 7 March. But, the first hurdle when comparing current accounts is to decide how the various options might fit in with your needs over the lifetime of the account.

"Current accounts are quite difficult beasts to compare because of the array of costs and features, and the fact that different people have different usage profiles," says David Black, a banking specialist at Defaqto.

Although it falls short of the best cashback offers, Nationwide comes into its own when you look at the terms of holding the account. First, there are no stipulations about the amount of money you deposit into the account, whereas First Direct demands at least £1,500 for three months and charges £10 for any month this is not kept up. Similarly, Halifax's Reward current account has a £5 monthly bonus but only for months that you deposit at least £1,000. A&L customers must pay in at least £500 a month to secure their £100 cash bonus. And, if you fail to pay in this money, A&L levies a £5 monthly fee.

The Nationwide deal is also open to existing customers, whereas most incentives are only for new customers, and if you have held an Abbey or Cahoot account in the previous three months you cannot get the A&L bonus because they are all part of the Santander banking group.

"Any switching incentive should be a bonus and not the main reason," says Michelle Slade of financial comparison site

If you regularly dip into your overdraft, compare the facilities available. A&L is highly competitive with a 0 per cent equivalent annual rate (EAR) overdraft and no fees for pre-agreed overdrafts for the first 12 months. Even after the first year, there is a 50p daily charge which is capped at £5 per month. The First Direct account also looks good with the first £250 interest free and 15.9 per cent payable above this amount. In contrast, Nationwide charges 18.9 per cent EAR for authorised and unauthorised overdrafts and the Halifax account could be a real sting, charging £1 per day for being in the red and £2 if your debit balance reaches £2,500.

Halifax's £5 monthly incentive applies whether you are in credit or overdrawn. The £5 reward is fixed and ongoing, so as long as you can guarantee depositing £1,000 a month, you can rely on having an account paying you £5 every month. Santander's Preferred In-Credit Rate current account offers an impressive 6 per cent AER on balances up to £2,500, which is fixed for the first 12 months, as long as you deposit at least £1,000 a month.

Keep an eye out for additional perks. For example, the accompanying debit card to the Nationwide FlexAccount is ideal for travellers because it charges nothing for European transactions and just 1 per cent in the rest of the world. For other travel goodies, the A&L Premier account comes with free annual multi-trip European travel insurance. Also, once you're a customer you can apply for the Santander Zero card and enjoy 12 months at 0 per cent interest on balance transfers.

A bank's reputation is another consideration. The big high-street names don't often fare well in this area, but First Direct prides itself on its customer service to the extent that it will give you £100 if you aren't happy and want to move to another bank.

"All that some people want from their bank is a reliable and consistently good level of service," says Andrew Hagger of "When you look at surveys, you'll see First Direct, Smile and The Co-operative Bank at the top for customer satisfaction."

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Life and Style
Fans line up at the AVNs, straining to capture a photo of their favourite star
life Tim Walker asks how much longer it can flesh out an existence
Life and Style
Every minute of every day, Twitter is awash with anger as we seek to let these organisations know precisely what we think of them
techWhen it comes to vitriol, no one on attracts our ire more than big businesses offering bad service
Professor David Nutt wants to change the way gravely ill patients are treated in Britain
people Why does a former Government tsar believe that mind-altering drugs have a place on prescription?
Norway’s ‘The Nordland Line – Minute by Minute, Season by Season’ continues the trend of slow TV
Arts and Entertainment
Jonny Evans has pleaded not guilty to an FA charge for spitting at Papiss Cisse
Life and Style
Kate Moss will make a cameo appearance in David Walliams' The Boy in the Dress
The image released by the Salvation Army, using 'The Dress'
Liverpool defender Kolo Toure
football Defender could make history in the FA Cup, but African Cup of Nations win means he's already content
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Customer Relations Officer

    £13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Jemma Gent: Project Coordinator

    £12 - £15 Hourly Rate: Jemma Gent: In this role you will report to the Head of...

    Recruitment Genius: Evening Administrator

    £8 per hour: Recruitment Genius: This Pension Specialist was established early...

    Day In a Page

    Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

    Homeless Veterans campaign

    Donations hit record-breaking £1m target after huge gift from Lloyds Bank
    Flight MH370 a year on: Lost without a trace – but the search goes on

    Lost without a trace

    But, a year on, the search continues for Flight MH370
    Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

    Germany's spy HQ springs a leak

    Thieves break into new €1.5bn complex... to steal taps
    International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

    Whirlwind wit of Simone de Beauvoir

    Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
    Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

    Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

    Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
    Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

    Confessions of a planespotter

    With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
    Russia's gulag museum 'makes no mention' of Stalin's atrocities

    Russia's gulag museum

    Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
    The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

    The big fresh food con

    Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
    Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

    Virginia Ironside was my landlady

    Tim Willis reveals what it's like to live with an agony aunt on call 24/7
    Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

    Paris Fashion Week 2015

    The wit and wisdom of Manish Arora's exercise in high camp
    8 best workout DVDs

    8 best workout DVDs

    If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
    Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

    Paul Scholes column

    I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
    Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

    From the Azteca to Vicarage Road with a million followers

    Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
    Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

    Khan ready to meet winner of Mayweather v Pacquiao

    The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
    War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

    Baghdad fights to win back Tikrit from Isis – but then what?

    Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable