It's a January sale – at a bank near you
There are bargains to be had by existing customers as well as new. But don't forget to shop around. Chiara Cavaglieri reports
Sunday 10 January 2010
Britons love anything with the word "sale" attached – just ask the retailers. Or HSBC, which launched its sixth annual sale last week. Lasting until 13 February, it offers discounts and incentives across the board, including 12 months of home insurance cover for the price of nine. Other discounts are up for grabs on mortgages, investments and pensions.
Most of the offers are aimed at either attracting new banking customers or persuading existing account holders to stay put. For example, the Plus account, which HSBC says offers up to £395 of benefits such as life cover, worldwide travel insurance and breakdown cover, would normally cost £12.95 per month, but customers applying during the sale period can receive the account for £6 a month for six months. There is also £50 cashback as an extra incentive, which is also available to people switching to the fee-free HSBC bank account.
HSBC has even followed in the footsteps of First Direct and Alliance & Leicester by offering a £100 incentive for customers switching to its Premier account. However, this is an exclusive account for customers with at least £50,000 of savings or investments with HSBC, who pay their annual income into the account, or customers with an individual income of at least £100,000, which again must be paid into the account.
HSBC is not alone in targeting current account customers with special offers. Many banks are focusing their cross-selling tactics on current account customers with a series of exclusive offers.
"Banks see the current account as the main relationship builder with the customer and it also enables them to have a much better understanding of the financial capabilities of each customer," says David Black, a banking specialist at Defaqto.
Halifax launched its own range of special offers last week for current account holders who deposit at least £1,000 each month, or Ultimate Reward current account holders. The offers include an extra 0.2 per cent on various savings products for one year and an extra three months at 0 per cent on purchases with the Halifax All in One Card.
Some Halifax mortgages are available with a reduction of between 0.2 per cent and 0.4 per cent. For example, the two-year fixed rate mortgage, which has a £995 fee and a maximum 60 per cent loan-to-value ratio, is reduced from 3.99 per cent to 3.69 per cent. These offers can work the other way round, with Santander offering its Zero current account exclusively to Abbey mortgage customers from tomorrow.
While discounts and freebies are not to be scoffed at, the risk is that customers will be too easily swayed and forget to shop around to see if there are better deals on offer.
"HSBC has run this sale for a number of years so it obviously works for it, but there is a danger that customers can get complacent, thinking that, because it's got a sale tag, it's a good deal," says Kevin Mountford, the head of banking and credit cards at comparison site Moneysupermarket.com.
Andrew Hagger, a money analyst from financial information service Moneynet.co.uk, is equivocal about the January offers. "Bank sales are little more than a marketing gimmick, most customers would prefer a consistently good deal from their provider, rather than just for a few weeks each year," he says.
For example, both First Direct and Alliance & Leicester are far less stringent about the terms and conditions of their cashback offers. First Direct offers £100 cashback to customers who switch to its current account and pay in at least £1,500 for the first three months, and Alliance & Leicester is reintroducing a £100 incentive tomorrow for new customers switching to its Premier current account who top up their ballances with at least £500 each month.
HSBC's special offers for existing customers include 50 per cent off LifeChoices insurance premiums for Plus and Premier current account customers for nine months, available for an extended period until 26 February. Similarly, for savers, HSBC has increased its standard rates for the Fixed Rate Saver by 0.75 per cent for three- or five-year terms for its Plus and Premier customers.
Once again, even with the bonus bringing both the three- and five-year accounts to a far more competitive 4.25 per cent, it pays to shop around. For example, on a three-year fixed-rate bond, ICICI Bank pays 4.7 per cent, while savers can earn 4.5 per cent with Halifax.
"Bank products are not always one size fits all, so before you look to bag your New Year bargain, take a few minutes to check out the competition as there may be better and more suitable deals available," says Mr Hagger.
That's not to say that banking offers aren't worth checking out, however. Nationwide building society, for example, is offering a market-leading unsecured loan at 7.6 per cent APR for loans from £7,500 to £14,000 for up to five years, but only to its current account customers.
First Direct current account holders have exclusive access to regular savings accounts paying an impressive 5 per cent AER, fixed for 12 months. This account requires savers to put away at least £25 on the same day each month and no withdrawals can be made within the 12-month period. By comparison, the best regular saver which offers a fixed rate is from Principality building society, which pays 4.5 per cent AER on deposits between £20 and £500 per month.
HSBC is also offering mortgage customers who take out a home loan before the sale ends on 13 February a 2.29 per cent discount mortgage, at a reduction of 1.65 per cent off HSBC's standard variable rate of 3.94 per cent for two years. This offer is available only to customers with a deposit of 40 per cent of their property value, but the reduction makes it 1.3 per cent cheaper than the best two-year fixed rate around at the moment. But do watch out for the relatively high fee of £1,499.
"For people that can't be bothered to shop around and are looking for a one-stop shop, there is some value in these types of offers. But as a word of caution, particularly with any short-term incentives, you've got to make sure the underlying product is right for you," says Mr Mountford of Moneysupermarket.com.
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
- 1 Moscow voted the world's unfriendliest city
- 2 The excuses your boss is most likely to believe when you call in sick
- 3 I'm pansexual – here are the five biggest misconceptions about my sexuality
- 4 More than 11,000 Icelanders offer to house Syrian refugees to help European crisis
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Senior British politicians tell David Cameron: When dead children are being washed up on beaches, it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don’t change Europe’s attitude to refugees, what will?
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...
Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...
Day In a Page
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.