Bank Account Freebies Cash Bonuses And Incentives When Switching Financial Institutions

Introduction

Financial institutions compete aggressively for new customers by offering various incentives and freebies when individuals open or switch current accounts. These incentives can range from cash bonuses to gift cards, preferential interest rates, and cashback schemes. The Current Account Switch Service in the UK, for example, has made switching accounts relatively quick and painless, with a guarantee that transfers are completed within seven working days. Since the service launched in September 2013, over 1.7 million people have used it to switch their accounts to new providers. In response, banks and building societies have enhanced their current account offers to attract customers. This article examines the best incentives and freebies currently available for those considering switching their current accounts.

Types of Bank Account Freebies

Cash Bonuses for Switching

Many banks offer substantial cash bonuses to individuals who switch their current accounts to their services. These bonuses can be particularly lucrative and serve as a direct incentive for customers to make the switch. For instance, Clydesdale Bank and Yorkshire Bank have been known to offer up to £150 cashback to customers who switch to one of their current accounts. Similarly, M&S Bank provides a £100 gift card that can be spent in-store and online when customers switch to one of their current accounts.

In the United States, banks offer cash bonuses that can be even more substantial. Associated Bank, for example, offers $750 in certain states (IA, IL, IN, KS, MI, MN, MO, OH, and WI), though this requires a $20,000 deposit. S&T Bank offers $900 in PA & OH, with $300 of the bonus being relatively easy to obtain, while the remainder requires a $25,000 deposit.

Interest-Bearing Accounts

Some current accounts offer competitive interest rates on in-credit balances, which effectively serve as a form of free money for customers who maintain sufficient funds in their accounts. Clydesdale Bank and Yorkshire Bank's Current Account Direct, for instance, pays 2% interest on in-credit balances up to £3,000, as long as customers credit £1,000 a month to the account.

Santander's 123 Current Account offers tiered interest rates: 1% on balances from £1,000, 2% on balances from £2,000, and 3% on balances from £3,000 all the way up to £20,000. This represents one of the best rates available on this amount of cash without locking it away for five years.

Cashback Offers

Several banks provide cashback schemes that reward customers for their regular spending. Lloyds Bank offers up to 15% cashback when customers shop online via the Lloyds' Everyday Offers website and use their debit card. Additionally, their student account provides up to £90 in Deliveroo vouchers when opening a new account.

Santander's 123 Current Account offers cashback on household bills: 1% on water, Council Tax, and Santander mortgage direct debits; 2% on gas and electricity bills; and 3% on mobile phone, home phone, broadband, and paid-for TV packages. The bank also offers up to 15% cashback when shopping in-store and online at participating retailers through their Retailer Offers scheme.

Referral Programs

Some banks operate referral programs that reward both the referrer and the referred individual when a new account is opened. Nationwide, for example, offers a referral program where both the referrer and the person who switches their main account to Nationwide using the Current Account Switch Service receive £50. Customers can refer up to ten people a year, potentially earning up to £500 in total through referrals.

Student Account Perks

Student bank accounts often come with specific benefits tailored to the needs of students. Lloyds Bank offers £100 cash and up to £90 in Deliveroo vouchers when students open a new student account. HSBC provides up to £1,000 in interest-free overdraft for students, with the option to request increases in subsequent years. Barclays offers similar overdraft options, with up to £500 interest-free in the first term, up to £1,000 for the rest of year one, and up to £1,500 in year two and beyond.

Major Banks Offering Freebies

UK Banks

Clydesdale Bank and Yorkshire Bank These banks offer £150 cashback to customers who switch to one of their current accounts, including the Readycash, Current Account Plus, Current Account Direct, Current Account Control, and Signature Current Account. To qualify, customers need to credit £1,000 (in a single payment) to their new account within 31 days of completing the transfer and maintain two active direct debits. The Current Account Direct pays 2% interest on in-credit balances up to £3,000.

Lloyds Bank Lloyds offers various incentives depending on the account type. Their student account provides £100 cash and up to £90 in Deliveroo vouchers. Their standard accounts offer tiered interest of up to 4% on balances up to £5,000 when paying at least two different direct debits from the account. Customers also get exclusive access and discounts on Lloyds Bank products like credit cards and mortgages, a £100 fee-free overdraft, and the chance to earn up to 15% cashback when shopping online via the Lloyds' Everyday Offers website. However, a £5 monthly fee is charged unless customers pay in at least £1,500 each month.

Santander Santander's 123 Current Account offers tiered interest rates: 1% on balances from £1,000, 2% on balances from £2,000, and 3% on balances from £3,000 up to £20,000. The account also provides cashback on household bills and up to 15% cashback at participating retailers. A four-month fee-free overdraft is included, though customers need to deposit at least £500 a month, set up two direct debits, and pay a monthly account fee to benefit from these perks.

M&S Bank M&S Bank offers a £100 gift card to spend in store and online when customers switch to one of their current accounts. The fee-free M&S Bank Current Account offers a £500 overdraft where the first £100 is interest-free and the ability to earn M&S Loyalty points when spending. The premium account costs £10 a month but offers £222 worth of M&S treats and vouchers throughout the year, along with loyalty points and preferential rates on selected products.

Nationwide Nationwide operates a referral program where both the referrer and the person who switches their main account to Nationwide receive £50. Customers can refer up to ten people a year, potentially earning up to £500 through referrals.

US Banks

Associated Bank Associated Bank offers $750 in bonuses for customers in IA, IL, IN, KS, MI, MN, MO, OH, and WI, though this requires a $20,000 deposit. Smaller bonuses are also available with lower deposit requirements.

S&T Bank S&T Bank offers $900 in bonuses for customers in PA & OH. $300 of the bonus is relatively easy to obtain, while the remainder requires a $25,000 deposit.

Firstrust Bank Firstrust Bank offers $450 in bonuses for customers in DE, MD, NJ, and PA. The bonus requires only $500 in debit card purchases, making it relatively accessible.

Truist Truist offers $400 in bonuses for customers in AL, AR, GA, FL, IN, KY, MD, MS, NC, NJ, OH, PA, SC, TN, TX, VA, WV, or DC. The bonus amount has been at a lower $300 level for some time.

Broadway Bank Broadway Bank offers $300-$400 in bonuses for customers in TX. The $400 bonus requires a $25,000 deposit, while the $300 bonus requires only a $2,000 deposit.

Farm Bureau Bank Farm Bureau Bank offers $250 in bonuses for customers in NV, with an additional $150 personal checking bonus available (though it's unclear if both bonuses can be obtained simultaneously).

Fulton Bank Fulton Bank offers $225 in business checking bonuses for customers in DE, DC, MD, NJ, PA, & VA. The bonus has been as high as $300 in the past.

1st United Credit Union 1st United Credit Union offers $200 in business checking bonuses for customers in CA. Accounts can typically be opened both in branch and online.

Wellby Financial Wellby Financial offers a $1,000 checking bonus with a $50,000 deposit (4.50% interest) for customers in TX.

Eligibility Requirements and Conditions

Minimum Deposits

Many bank bonuses require customers to deposit a minimum amount into their new account. For example, Associated Bank requires $20,000 for the full $750 bonus, though smaller bonuses are available with lower deposits. S&T Bank requires $25,000 for their $900 bonus, though $300 of that bonus is easier to obtain. Firstrust Bank, in contrast, only requires $500 in debit card purchases for their $450 bonus, making it more accessible.

Direct Debit Requirements

Several banks require customers to set up and maintain a certain number of direct debits to qualify for bonuses and benefits. Clydesdale Bank and Yorkshire Bank require two active direct debits to qualify for their £150 cashback offer. Santander also requires two direct debits for their 123 Current Account benefits. Lloyds Bank requires at least two different direct debits to qualify for their tiered interest rates up to 4%.

Balance Maintenance

Most bonuses require customers to maintain a minimum balance in their account for a specified period. For example, Santander's 123 Current Account requires customers to deposit at least £500 a month to maintain benefits. Lloyds Bank requires customers to pay in at least £1,500 each month to avoid the £5 monthly fee.

Time Restrictions

Many bonuses have specific time limitations. Clydesdale Bank and Yorkshire Bank require customers to credit £1,000 to their new account within 31 days of completing the transfer to qualify for their £150 cashback. Santander's 123 Current Account includes a four-month fee-free overdraft period.

How to Maximize Benefits

Strategic Switching

Customers can maximize benefits by strategically switching accounts to take advantage of the best available offers. Since the Current Account Switch Service in the UK guarantees transfers within seven working days, switching has become relatively quick and painless. By researching and comparing offers, customers can select the account that provides the most value based on their individual needs and circumstances.

Referral Programs

Referral programs like the one offered by Nationwide can be particularly lucrative for customers with extensive networks. By referring up to ten people a year, customers can potentially earn up to £500 in total through referrals. This approach requires convincing others to switch their accounts, but the potential rewards make it worth considering for those with large social or professional networks.

Combining Offers

In some cases, customers may be able to combine different types of benefits to maximize value. For example, maintaining a balance in an interest-bearing account while also participating in a cashback scheme can provide multiple streams of benefits. Similarly, using a student account during education years and then switching to a different account with better interest rates or cashback offers afterward can optimize financial benefits throughout different life stages.

Considerations Before Switching

Fees

While many accounts offer attractive bonuses and benefits, it's important to consider any associated fees. For example, Lloyds Bank charges a £5 monthly fee unless customers pay in at least £1,500 each month. Similarly, M&S Bank's premium account costs £10 a month, though it offers additional benefits like £222 worth of M&S treats and vouchers throughout the year. Customers should weigh these fees against the potential benefits to determine whether the account is truly cost-effective.

Interest Rates

Interest rates can vary significantly between accounts and may change over time. While some accounts offer attractive introductory rates, these may not be sustainable in the long term. Customers should consider whether the interest rates offered by an account are competitive compared to other options and whether they are likely to maintain their balances to continue benefiting from these rates.

Overdraft Facilities

Overdraft facilities can be an important consideration for customers who may occasionally need to spend more than they have in their accounts. Different accounts offer different overdraft limits and terms. For example, HSBC offers up to £1,000 in interest-free overdraft for students, with the option to request increases in subsequent years. Barclays offers similar overdraft options, with limits increasing over time. Customers should compare these facilities to ensure they meet their potential needs.

Long-Term Benefits

While attractive bonuses and incentives can be compelling, customers should also consider the long-term benefits of an account. This includes factors like the quality of customer service, the convenience of branch and online banking services, the range of additional products offered, and the bank's reputation for reliability and customer satisfaction. An account that offers a substantial bonus but poor service may not be the best choice in the long run.

Conclusion

Bank account freebies and incentives can provide significant value to customers, ranging from cash bonuses and gift cards to preferential interest rates and cashback schemes. By understanding the different types of offers available, the eligibility requirements, and how to maximize benefits, customers can make informed decisions about switching accounts to take advantage of these opportunities. However, it's important to consider not only the immediate incentives but also the long-term benefits and any associated fees to ensure that the chosen account remains cost-effective and meets individual financial needs over time.

Sources

1. Loveinc.com - The Best Current Account Incentives and Freebies
2. The Tab - Ranked These Student Banks Accounts Have The Best Perks In 2025
3. Doctor of Credit - Best Bank Account Bonuses
4. Weiss Ratings - Here Are 4 Financial System Freebies
5. AARP - New Bank Account Bonus Offers