Can I open multiple current account to milk switching bonuses?

When it comes to your personal finances, loyalty rarely pays and with current accounts it’s no different.

While many are happy to stick with the same bank they have been with for a long-time, for serial switchers, hoovering up incentives to open accounts is a way to boost the coffers in a time of low savings rates.

Switching can bring a host of financial perks including cash, improved interest rates, cashback on spending and lifestyle benefits such as free cinema tickets or magazine subscriptions.

Play the system: with so many banks offering switching bonuses and other perks, if managed correctly, having multiple current accounts could see you make a decent return.

Figures from the Current Account Switching Service show that more than 7.6 million people have switched their bank account since 2013.

That may sound like a cause for celebration. In fact it’s just 1.6 million more people than the number who switched energy supplier in 2020 alone.

Those who switch their main bank account every once in a while are clearly in the minority, but what about those who hold multiple accounts and switch all the time?

Becoming a serial switcher will require you setting up various current accounts to begin with and then spending a few hours researching current accounts in return for a cash switching bonus or some other perk.

The good news is that switching itself is now easier than ever, with CASS pledging to transfer your account and any direct debits over in seven days.

Halifax, First Direct, NatWest, Nationwide and Santander are all offering new joiners cash incentives in excess of £100. First Direct’s £130 cash offer ends tonight at midnight

At face value, being a serial switcher could be an extremely effective way of not only making your money work harder, but also landing you with an extra few hundred pounds each year when taking advantage of some of the cash switching bribes.

However, it’s not as simple as setting up multiple bank accounts, switching them and watching the money just roll in.

Banks offer cash incentives in the hope you’ll make its current account your main account.

There are therefore often various hoops that need to be jumped through before the offer will be honoured, such as maintaining a minimum balance, setting up direct debits and paying in a minimum amount into the account each month.

While having multiple current accounts has obvious benefits, it will also involve a fair amount of admin to ensure you are avoiding any unnecessary account fees.

For example, Santander which is currently offering a £130 cashback offer requires you to complete the switch within 60 days of requesting the switch, set up two direct debits, deposit at least £1,000 into the account and log in to your account using either online or mobile banking.

Furthermore, although serial switching can clearly make for a profitable merry-go-round, there will be limits on how much a person can do so during a given time period.

For a start, current account providers will not allow you to switch back and forth, benefiting more than once from the same offer.

Many providers also have clauses in their terms and conditions that will prevent serial movers from repeated switchers – either in a given time period or forever.

For example, Santander state you cannot have previously received or participated in any other incentive for switching to any of its current accounts to be eligible for its current cash bribe.

First Direct will not offer its incentive to any person who has ever had a First Direct account before or someone who has opened a current account with HSBC since January 2018.

We take a closer look at all the main banks currently offering cash incentives and break down how you can take advantage.

Q&A: What you need to know about multiple switching

If you are tempted to become a serial switcher, one of the key things is to already have a second current account that you don’t use as your main one.

You can then ‘switch’ from this account to take advantage of the incentive on offer.

You’ll also need to be organised, for example – moving money from one account to another to meet inflow rules, and knowing that when opening a current account, you will go through a hard credit check.

We spoke to Michelle Stevens, deputy editor at the personal finance comparison site Finder and Lynn Beattie, founder of the personal finance website Mrs Mummypenny to help better understand if it’s worth the hassle.

Can I have multiple current accounts? Do I need to close my main account to switch?

Lynn Beattie replies: Yes, it’s possible to have as many bank accounts as you want to take advantage of the new account cash incentives.

But it does take organisation and time to benefit from those offers.

You don’t have to swap your main account to switch. You can use your back up accounts.

But do carefully check the terms and conditions of the offer, and that you meet all the requirements before doing so.

Will I still get paid for opening a current account?

Michelle Stevens replies: The key thing to remember here is that you are getting paid to switch, not to open a current account.

It will require you to close an existing current account and transfer all your payments to the new account.

So you couldn’t take advantage of multiple switching incentives if you only had one account to switch to start with.

You will need to open multiple current accounts first and then you can begin switching.

Is it possible to take advantage of all the perks on offer?

Lynn Beattie replies: There are often several cash incentives available for setting up a new bank account.

Read the terms and conditions of each offer carefully and I would recommend setting up a spreadsheet to keep track of everything.

Conditions include things like a minimum payment in each month, a minimum number of transactions, a minimum level of regular direct debits to be set up.

And there will be a minimum amount of time of holding the account before any bonus is paid.

Once you understand these rules then go for it, set up the accounts, set up the monthly income to flow between the accounts and a direct debit to each account.

This can get complicated, hence the need for the spreadsheet to keep track of everything. Particularly of the dates when you should receive your bonus.

Can you just set up direct debits from one account to another?

Michelle Stevens replies: As for the ‘circular’ direct debit theory to meet a bank’s requirements, while you can set up standing orders to move money between your bank accounts, it’s not possible to set up a direct debit from one of your own current accounts to another.

Direct debits are in relation to common bills such as your mortgage, monthly insurance payments, energy bills, broadband, water, council tax, music and tv subscriptions.

Can it damage your credit file?

Lynn Beattie replies: Opening a bank account does incur a mark on your credit file, its classed as a hard check.

I would not recommend doing this if you have a mortgage application or any other debt application coming up in the next six month to one year.

Are there any other advantages of having multiple current accounts?

Michelle Stevens replies: Apart from the switching freebies, there are other advantages to having more than one bank account.

There may be features of one account that are more handy in certain situations – for example, if the accompanying bank card has no fees for spending money abroad, which is a perk you can get with a few digital banks.

You might also prefer to have an additional account to put some money aside into and help you budget.

Plus if there were to be an outage at one of your bank account providers, or if you lost your bank card, you have the reassurance that you can access the money in your other account.

Is it worth the hassle?

Michelle Stevens replies: While the Current Account Switching Service has made the process of switching a lot easier, it is worth considering whether you can be bothered to open and maintain several current accounts, all with different providers.

They will each have different banking apps and internet platforms to get to grips with, and all of which you should be monitoring for any suspicious or fraudulent activity.

What’s on offer? £125 cash bribe.

Bonus criteria? You need to switch your old account held elsewhere to a new Halifax Reward current account using the Current Account Switch Service by 14 December.

There is no minimum pay in but you’ll need to pay in £1,500 each month to avoid a £3 monthly account fee for the Reward account.

Who can’t get the bonus? Those who have received cashback for switching to Halifax since April 2020 and those who are already Halifax current account customers.

How soon will I get paid? The offer will be paid directly into your account within 3 working days of your switch completing.

Can I switch account as soon as the incentive arrives? Yes

Extra perk for sticking with the account? The choice of £5 a month paid into your account, two film rentals or three magazine rentals, or a free cinema ticket each month.

Conditions for sticking? Pay in £1,500 a month. Spend £500 on your debit card each month or maintain a balance of £5,000 – otherwise you’ll be hit with a £3 monthly account fee.

What’s on offer? £130 cash incentive (warning this offer ends at midnight tonight).

Bonus criteria? Need to switch and close previous current account using the current account switching service by midnight tonight and pay in at least £1,000 within three months of opening the account.

Who can’t get the bonus? Any person who has ever had a First Direct account before or someone who has opened a current account with HSBC since January 2018.

You may hold a HSBC account and still qualify for the offer, as long as the current account was opened before 1 January 2018.

How soon will I get paid? You’ll get the money within 28 days of all the bonus criteria being met.

Can I switch account as soon as the incentive arrives? Yes

Extra perk for sticking with the account? £250 interest-free overdraft

Conditions for sticking? None

What’s on offer? £130

Bonus criteria? Need to switch and close previous current account. Within 60 days of requesting the switch, you will need to complete the switch, set up two direct debits, deposit at least £1,000 and log in to your account using either online or mobile banking.

Who can’t get the bonus? If a customer has had a switching incentive from Santander in the past then they won’t be eligible for the current £130 switching offer.

How soon will I get paid? Santander will assess eligibility on day 60 and if the customer has met the eligibility criteria, then payment will be made within 30 days of this.

Can I switch account as soon as the incentive arrives? Yes

Extra perk for sticking with the account? Santander will pay between 1 and 3 per cent cashback on bills, although this is capped at £5 each month.

It also pays 0.3 per cent interest on balances up to £20,000 – although you would be better keeping your money in a top paying easy access savings deal than fully utilising this.

Conditions for sticking? There is a £4 monthly fee. You must also pay in £500 a month and maintain two active direct debits.

What’s on offer? £100 +£50

Bonus criteria? Need to switch and close previous current account.

Pay in at least £1,500 and log in to its mobile app or online banking by 13 January.

Once qualified for the £100 payment, you need to make 10 transactions on your account every month for nine months between January and September 2022.

Who can’t get the bonus? If you have received a switching cash offer from a NatWest, RBS or Ulster account since October 2017 you won’t be eligible.

How soon will I get paid? the first £100 will be paid by 11 February 2022. The extra £50 will be paid by 30 November 2022.

Can I switch account as soon as the incentive arrives? Yes

Extra perk for sticking with the account? £5 a month back in rewards plus 1 per cent back from certain partner retailers.

Conditions for sticking? £2 monthly fee. Must set up two direct debits a month for £4 bonus, and then log into mobile banking once a month for £1 bonus.

What’s on offer? £100 switching incentive and if you are a Nationwide member, you’ll get £125 for switching.

Bonus criteria? To qualify for the incentive, switches must be made using the Current Account Switch Service and a minimum of two active Direct Debits must be transferred as part of the switch.

Who can’t get the bonus? Anyone switching from a Nationwide current account isn’t eligible as well as those who’s account has been frozen or is subject to debt collection.

How soon will I get paid? Within 10 days of the full switch completing.

Can I switch account as soon as the incentive arrives? Yes

Extra perk for sticking with the account? 2 per cent interest up to £1,500 although after the first year it’s cut to 0.25 per cent. There is also Interest-free arranged overdraft for the first 12 months.

Conditions for sticking? Pay in £1,000 a month.

All offers valid at the time of writing: 22 November 2021.

THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS

Lloyds Bank’s Club Lloyds account will pay £125 when you switch. There is a £3 monthly fee but this is waived if you pay in at least £1,500 each month. You also earn monthly credit interest on balances up to £5,000 and can choose a reward each year, including 6 cinema tickets.

Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.

HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.

First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.

Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.

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Q&A: What you need to know about multiple switching

THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS

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