Nationwide is on a mission to lure in new current account customers, offering cash bribes of up to £125 to potential switchers.
Britain’s biggest building society will pay £125 to existing members who switch their current account, while completely new customers will receive £100 for switching.
For switchers to be deemed a member and qualify for the more generous switching bribe, they will need to either hold a savings account or residential mortgage with Nationwide.
Members must use Nationwide’s Internet Bank to switch a current account they hold with another provider to an existing account they already hold with the Society or open a new account to switch to using Nationwide’s website, Internet Bank or Mobile Banking App.
Switches must be made using the Current Account Switch Service (CASS) and a minimum of two active direct debits must be set up on the new account.
For those who already have a Nationwide current account, they can still benefit, but they’ll have to switch a current account over from another provider.
Tom Riley, director of banking and savings at Nationwide, said: ‘We always look to reward our members’ loyalty with exclusive products and services.
‘This is why our new switching incentive offers a higher level of reward for existing members compared to those who are new to the society.
‘We believe our mutual difference is the reason that the society continues to be one of the main winners of the Current Account Switch Service as people look for a provider that will not only offer a compelling account, but also one that has a strong focus on reward member loyalty.’
What’s behind the cash incentive?
Nationwide has gained 590,255 more current account switchers than it has lost since the start of 2014 when the CASS began, according to analysis by MoneyComms.
This is more than any other current account provider. Santander, the next most successful provider, made a net gain of 323,483 during that time.
But, in the final six months of last year Nationwide lost 7,382 more customers in switches than it gained. For the first time since the CASS began, it recorded customer losses over consecutive three month periods.
Although it regained some ground in the first three months of this year, recording 1,474 switches, the society was still a long way short of both Starling Bank and Virgin Money, which made net gains in excess of 17,000.
Nationwide may therefore be hoping that its new cash incentive will enable it to return to its winning ways, particularly given the lack of competitive switching offers across the market as a whole.
Rachel Springall, finance expert at Moneyfacts said: ‘The switching offer from Nationwide is notable, especially as many current account providers pulled their own offers over the past few months.
‘It could be timed to entice customers when there is little incentive to move elsewhere.’
What perks are other banks offering?
Cash bribes have been a rarity for current account switchers over the past year, and those that do appear are often short lived.
HSBC is currently dangling a £140 cash carrot in a bid to lure in new current account customers, albeit only until this Thursday.
Similarly, Virgin Money is offering joiners a £150 Virgin Experience Days gift card allowing its customers to choose between thousands of experiences from spa days and short breaks to sky diving.
Cash carrot: HSBC is offering current account switchers an £140 cash bribe until 19 August
Nationwide has not said when the incentive will expire, and its simple cash offer may make it more appealing to some than Virgin’s voucher offering.
The offer applies to any one of Nationwide’s three main current accounts. This includes its FlexDirect account, which pays 2 per cent interest on balances up to £1,500 and has a fee-free overdraft for the first 12 months, as long as customers pay £1,000 each month into the account.
Those unable to meet the £1,000 monthly requirement can opt for Nationwide’s FlexAccount, which allows them to bank online and in branch for no fee.
For those seeking a more comprehensive package, the FlexPlus account includes worldwide family travel insurance, mobile phone insurance, UK and European breakdown cover and no transaction fees for using a debit card abroad – albeit for a fee of £13 per month.
However, whilst the cash bribe and choice of accounts might tempt many people to switch to Nationwide, there are other factors that experts say are also important to consider.
Starling Bank is rated as the number one provider for service levels, according to the latest annual survey by the consumer group, Which?
These include customer service, overdraft limits, interest rates, cashback, saving perks and an array of other niche benefits such as cinema tickets.
Starling Bank, for example, doesn’t offer incentives to switchers, instead relying on the strength of its customer service and its app.
‘Switching current accounts has many advantages, whether it be to acquire a perk or even to save money from a more cost effective overdraft tariff or to gain a better level of service,’ said Springall.
‘Customers may be better off picking an account with a package of benefits instead of choosing an account for its upfront perk, however. Incentives are only worthwhile if consumers make good use of them.’
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