Moving your checking account to another bank can now be even more lucrative, as two more providers have announced incentives for those who join.
From tomorrow, anyone switching to a TSB current account will be able to receive up to £200 in the first year.
Meanwhile, a new digital bank, Kroo, is looking to attract customers by offering what is now arguably the best deposit rate on the market.
In recent months, several banks have launched generous offers for those wishing to exchange their current account.
Time to switch banks? TSB and Kroo offer incentives likely to attract customers
Santander last week began offering a cash incentive of £200, matching a £200 offer from Lloyds and improving on a £175 offer from First Direct.
What does TSB offer?
From tomorrow, customers who switch to TSB’s free Spend & Save current account or £3 per month Spend & Save Plus will receive £200, paid in two instalments.
Switchers will receive £125 cashback if they apply before March 3 and switch to TSB using the current account switching service before March 24.
They will need to set up at least two direct debits, use their debit card at least once, and log into TSB’s online banking or mobile banking app to receive the first payment in their account by April 21. .
An additional £75 will be paid into their account by October 31 if they keep their account open, pay at least £500 each month, make five debit card payments and maintain two direct debits.
Those who switch to TSB’s Spend & Save account can earn £5 a month cashback for the first six months as long as they make 20 or more payments to their debit card each calendar month.
From February 1, customers upgrading to a TSB current account will receive up to £200
TSB’s Spend & Save Plus account also offers £5 cashback per month, but without the six-month time restriction. It also does not impose any fees when using a debit card abroad.
However, its benefits are thwarted by the £3 monthly fee for maintaining the account.
In addition to switch and cashback offers, TSB’s two current accounts come with linked instant access savings accounts paying 2.52% interest.
TSB allows customers to set aside money in up to five individual savings pots, each with a maximum balance of £5,000 per pot, or £25,000 in total.
Someone hiding £10,000 could therefore earn £252 in interest over the course of a year.
Although not among the best rates around, it is among the best rates offered among the other big names on the high street.
>> Check out the best easy-to-access savings rates here
What does Kroo offer?
Digital challenger bank, Kroo, is raising its current account interest rates to 3.03% on balances up to £85,000 from February 1.
The rate change will arguably make it the best UK bank account for earning interest.
Nationwide is offering 5% interest to new entrants in the first year – but only on balances up to £1,500.
Someone who keeps a balance of £10,000 in their Kroo checking account can expect to earn £303 over the course of a year, if the interest rate stays the same.
Kroo is a digital bank founded in 2016. It obtained its full UK banking license earlier this year and is now launching its first checking account
Cash held with the bank is fully protected by the UK Deposit Guarantee Scheme (the FSCS), meaning customer deposits are protected up to £85,000 per person.
In addition to the highest interest rate, Kroo’s current account allows customers to split, track and split bills.
It also offers zero fees on spending when using its debit card abroad and a lower overdraft APR than most major banks.
This is Money introduced the bank when it launched last year, including comparing it to rivals Monzo and Starling.
The app can provide reminders when customers have an upcoming payment
Those wishing to take advantage of the Kroo offer will not need to use the current account switching service to do so.
It could simply be used as a secondary bank account, as there are no fees or requirements for creating an account – unlike TSB.
However, to create an account, users will need to download the mobile app and go through a quick five- to 10-minute registration process.
Andrea De Gottardo, Managing Director of Kroo, said: “We want to change the way banking is done and move away from the profit extraction model of yesteryear.
“The 3.03% interest allows customers to grow their balance like a savings account without having to move money from an e-saver account.
“Our current account allows you to do your banking in one place, without traps or gimmicks.”
Kroo was granted a full banking license in the UK earlier this year, only the third bank to receive one since 2016.
Last year, Kroo received the Best Newcomer 2021 award from the British Bank Awards and the Banking Innovation Newcomer Award 2021 from the Finder Awards.
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