As the cost of living crisis is biting and increased energy prices loom large on the horizon, many Brits are keen to get their hands on some extra cash. It seems that a rising number of high street banks have recognised this by increasing their switching bonus for new customers. With that in mind, here’s how you could get paid £150 for switching your current account.
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What is a switching bonus?
Many popular banks offer a switching bonus to people who move to them from a different account provider. The bonus acts as an incentive to encourage customers to change their accounts during times when people are in need of extra money.
The current account switching bonus is a one-off payment that is not taxable. This is because bank cashback payments are classed as discounts and not taxable income. The cash is usually placed into the new current account once the switch is complete, meaning it can be spent whenever you please.
Switching incentives have always been around. However, a number of banks have increased their bonuses in 2022. This is due to the rising demand for extra money as inflation continues to rise.
How to get paid for switching your current account
Switching your current account is fairly straightforward and can be done online. Before making a switch, take time to read through all of the information that is available for your new bank and consider what options are the best. It is also a good idea to run a comparison between different current accounts to ensure that you choose the best one.
While terms and conditions aren’t always the most exciting documents, it is also vital that you fully read through these before making any decisions.
When you’ve made up your mind, you can apply for your new current account online. You will usually need to provide a summary of your recent financial information as well as information regarding taxable income, permanent address and any changes to your income that may occur in the near future.
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Your new current account holder should be able to transfer your cash from your old account. Most banks use the new switching service, which means that the transfer should be completed within seven working days. Usually, you will be asked to choose the date that you would like to start using your new account and the switching process will begin six days before this.
If anything goes wrong within the seven-day switching period, you will be covered by a guarantee. You will receive the cash bonus into your new account when it is available for you to use. As well as this, your old bank account will automatically close when the switch has been completed.
What current accounts offer the best switching bonuses?
If you’re in need of some extra money, switching your current account could be a great short-term solution. The best accounts offer up to £150 for new customers along with a number of other incentives. These incentives include high interest rates for savers, interest-free overdrafts and access to exclusive savings accounts.
The best way to find a good switching offer is to conduct a current account comparison. It is also a good idea to do a few comparisons yourself to fully understand the different account options that are available. Some current accounts may offer lower cash incentives but more competitive interest rates. The best one for you will depend on what you’re looking for in your new bank.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
