The battle between UK retail banks to win the bank balances of mainstream customers is back in full swing.
Banks are now offering cash incentives – and even free wine – to entice customers to switch their current account this month.
HSBC this week launched a new £125 cash perk – available to all new customers in the UK.
First Direct is offering £100 cash to those customers switching to its 1st Account, while HSBC is offering £125 to anyone switching to its Advance or Premier current accounts.
Virgin Money boss David Duffy has got his eye on almost 800,000 new current accounts. That is roughly the number of customers the 59-year-old chief executive expects to lure from rivals at Lloyds, Barclays, NatWest, HSBC and the rest with a bold new strategy that – he hopes – will set the cat among the pigeons in the banking world.
This week, Duffy is set to unveil a rewards scheme that will give Virgin Money current account customers access to hefty discounts on the broadband, gym memberships and holidays sold by its sister brands in the Virgin Group.
Initially, all Virgin Money current account customers will be offered a discount worth £225 on selected 18-month Virgin Media packages – potentially slashing up to a fifth off the cost of broadband, TV and a phone line.
Nothing is free
As ever, the new offers come with conditions. The First Direct offer is valid when customers switch their everyday banking using Cass, and pay in at least £1,000 within three months.
For the HSBC Advance account, customers must pay in £1,750 a month or £10,500 over six months.
For the Premier account, you have to have an annual income of at least £75,000 and a mortgage, investment, life assurance policy or protection product with the bank – or £50,000 of savings within six months of opening the account.
The Virgin current account comes with a linked savings account which has to be credited with £1,000 within the first 31 days of opening it.
The gambit is working
According to the Current Account Switch Service (Cass), set up by banks to smooth switching, Halifax gained more than 22,000 new accounts from July to September last year.
In the middle of that same period, it had a £100 switching offer for new customers.
During the same period, HSBC did not launch a cash offer until midway through September – and it lost almost 15,000 accounts.