The banking trick we used to get £1,300 of FREE money in six months (2024)

You are more likely to get divorced than change your bank account. Millions of savers will never switch banks, entrusting their money with one organisation for life.

But for those who do switch, there are huge rewards to be snapped up.

A range of ‘switching bonus’ offers have become available in recent months, with high street banks offering as much as £200 as well as perks such as free cinema tickets and Disney Plus if you close your old bank account and open a new one with them.

Right now, three different British banks will pay between £160 and £190, plus other perks, to any new current account customers.

In June, I embarked on a switching saga to bag as many bonuses for switching a current account as possible and see how much ‘free’ money I could make.

I also signed my husband Paul up for the ride and after wrestling with various banking apps, he seems to be considering whether divorce would in fact have been easier.

Paul is the longsuffering victim of this mission, which has resulted in a mountain of paperwork, a selection of unusable plastic cards and an endless number of PIN codes and biometric and ‘memorable name’ combinations, which invariably turn out not to be memorable at all.

But by September, we will have amassed a growing pile of cash that should total more than £1,300 in just weeks – enough to pay for our daughter’s expensive music trip this summer with a little headroom to spare.

While the money is attractive, each offer requires you to jump through a large number of hoops and despite the Current Account Switching Service’s claim that switching accounts is ‘simple, reliable and stress free’, my experience has been that there is many a glitch along the way and that you must have the patience of a saint, the memory of an elephant and the technical facility of Bill Gates to get through the process with your sanity intact.

Still, £1,000 is not to be sniffed at, and while some of the deals I bagged have been pulled since I started this process there are new good deals available and more could be launched at any time.

So, if you want to follow suit and make money too, here’s how I did it – and the mistakes I made so you don’t have to.

Step 1: Barclays

The best decision I made in our switching marathon was not to mess with our everyday banking. If you plan to do it only once, then switching your main current account tends to be worth it.

However, as Paul and I planned to switch accounts several times, we didn’t want to risk causing havoc with our everyday banking, for example by missing an important payment, if something went wrong along the way. Paul and I have had the same joint current account with Nationwide for many years and are happy with it.

Instead, we both opened a free online bank account with Barclays as a ‘donor account’, from which we would subsequently switch to earn the bonuses.

We chose the account because Barclays very rarely offers switching incentives so I didn’t expect to need to switch to it to earn a bonus later. Banks only tend to offer switching incentives to those who have not been a customer within the last few months.

Most bank switching offers require you to transfer over several direct debits from your old to your new account to be eligible for a bonus, so we each set up three active direct debits to charities we support.

Direct debits can be as little at 50p but that seemed mean to the charities. We set ours up at £3 each.

Opening a Barclays account was initially smooth, though as you will see below it created difficulties later. I downloaded Barclays’ online banking app on my mobile and followed the instructions to set up a new account.

I was asked for a scan of my driving licence and to take a clear video of my face and voice to verify my identity. Once past these checks, the account was open and accessible within minutes. I deposited just £10 in the account as evidence that it was an active account.

A plastic card arrived in the post later, but I never needed to use it. It took about a week for the direct debits to show up in my online banking app and, as soon as they did, I switched away in search of my first switching bonus. Paul did the same.

Account opening experience: 10/10 (at the time)

Cash bonus: £0

Other perks: £0

2: Club Lloyds

It was time for our first switch. To switch an account you must fill in a form online with the bank you want to open an account with or you can apply in their online banking app. There is no need to do anything else as the new bank will liaise with your current one to handle the switch in seven days.

By the end of the seven days, any money you had in your previous account should have been transferred into the new one and your direct debits should automatically change over too.

The Current Account Switching Service (known as Cass) was set up in 2013 to help make the process smoother as too few customers were switching accounts. As part of the process, Cass will also inform those who credit your account about the change too, including your employer. Any misdirected payments should be redirected for free for 13 months and any errors that cost you money should result in compensation.

For the first switch, Paul and I started with the easiest bank bonus possible. We moved out of the Barclays accounts into a new Lloyds account to bag a £175 bonus each.

Opening the account online was relatively easy, requiring a passport as identification. To earn the cash, Lloyds required an account to have three active direct debits set up before switching, and as I knew these were already set up in both cases this seemed like a quick win.

The switching process required no extra steps - we didn’t have to pay any extra money into the account and there was no minimum level of spending on a debit card.

In both cases, Barclays completed the switch within a seven-day period using Cass and sent letters in the post assuring us the accounts had been securely closed. This turned out not to be the total truth, we discovered later, but the experience was very smooth at the time.

The Lloyds bonus was paid almost instantly into the accounts. The Lloyds deal, which ended on July 30, required us to open a Club Lloyds account, which would usually cost £3 a month unless you put £2,000 or more in the account monthly. However if you switch away in the first few weeks you are unlikely to pay this.

The account offers a yearly ‘Lifestyle Benefit’ of either cinema tickets, a magazine subscription, free Disney Plus or membership of a restaurant discount club. However, we weren’t planning to stick around long enough for any of that. We did receive separate mailings about these bonuses but despite ordering cinema tickets they didn’t arrive- presumably because we switched away.

What I had not anticipated was that Lloyds would require a posted ‘activation code’ for me to access my new bank account. In Paul’s case this went smoothly, but my activation code never arrived, so I was never able to get into this account. Other post from the bank, including a plastic card, did arrive.

Fortunately, Lloyds texted me to say the £175 bonus had been paid into my account almost immediately after it was opened, so my inability to get into this account did not inconvenience me too much as I switched away again immediately, and the £175 duly arrived in the next account I opened.

However, had I switched my main account, the vagaries of Royal Mail would have caused huge banking problems as I wouldn’t have been able to access my money. A quick trawl of review sites indicates I’m not the only one to have ended up locked out of a new Lloyds account by a Royal Mail failure.

Account opening experience: 6/10 (waiting on Royal Mail is far from ideal and the code eventually arrived two and a half weeks later. However, the cash was paid quickly, and the rest of the process was smooth.)

Cash bonus: £350 (£175 each)

Other perks: We didn’t stick around long enough for the cinema tickets, but then we weren’t charged the £3 either.

3: Nationwide FlexAccount

I had originally planned to switch to Santander after Lloyds, as it offered a £175 bonus, but the bank switching offer was pulled out from under me while I was waiting for the Lloyds switch to complete. Santander frequently offers switching deals so I made a note to keep an eye out for a future bonus.

Instead, as longstanding customers of Nationwide, we chose to take advantage of Nationwide’s loyalty offer and switch the Lloyds accounts into Nationwide for a promised bonus of £200 each. This deal has since closed.

We each opened an individual free FlexAccount. Despite applying for the new account using our existing app, the opening process still took us to a website that asked details about annual salaries and other data that I was surprised wasn’t known already, but the opening process was otherwise completely smooth. Once opened, we were able to enter switching details into the app to move the Lloyds account across.

Nationwide communicated details of the switch by text, including whether we had qualified for the switching bonus. The £200 is unavailable for those who have received the bonus in the past already.

We both qualified and the £200 landed in each of our accounts two weeks or so after the successful switch over.

Account opening experience: 9/10 (though we were with Nationwide before which probably made it easier)

Cash bonus: £400 (£200 each)

Other perks: None

4: First Direct

The First Direct £175 switching offer is where our experience of bank switching started to get sticky. First Direct – which is part of HSBC - boasts that only one in five applications requires further information before an account is opened and that most can get access to their new account immediately.

However, both Paul and I struggled to open these accounts and had to wait for several different activation codes to be sent by post – including a telephone banking code – before we could get into the accounts at all.

I spent half an hour on the phone to First Direct’s call centre trying to work out why I was being given an error message every time I tried to generate a security code to get into my account, and Paul had similar issues.

Switching and bonus wise, the process was slow. Switching should take just seven working days, but even once the First Direct account was finally open and accessible, the bank only allows customers to select a date ten working days in the future for the switch to complete, which it says is to ensure it is ‘consistently able to deliver against the timescales provided to customers, even during periods of high application volumes’. So much for seven-day-switching.

While the switch itself eventually went smoothly, the bank does not guarantee to pay the switching bonus until the 20th of the month AFTER the switch completes and does not confirm when it will pay or whether you’ve qualified in advance.

Meanwhile, you must jump through several hoops to ensure you receive the cash – depositing £1,000 into the account, leaving it there overnight and carrying out at least five transactions with your First Direct debit card within a 30-day period.

The good news with First Direct though was that we both received extra cash for opening the accounts through a cashback website. These payments are separate and paid out to those who use these sites to carry out their shopping, though deals change frequently.

This amounted to £45 each from Topcashback for opening the accounts and I got an extra £25 for referring Paul to Topcashback in the first place. To secure the cashback, we went on the Topcashback website and selected the deal with First Direct.

We clicked on a link that took us through to the bank’s website and could then open a new account as usual.

This was paid far earlier than the switching bonuses, which I am still waiting for. I’ve been assured the First Direct rewards will be paid by the 21st of this month.

Account opening experience: 5/10 (First Direct’s staff were helpful but we both had problems opening and accessing these accounts and both ended up having to spend time on the phone, while the lack of updates and slow speed of switching and paying was frustrating)

Cash bonus: £350 (£175 each) from First Direct and £115 (£45, £45, and £25 from Topcashback)

Other perks: £100 free overdraft and 7 per cent Regular Saver, which we didn’t use

5: Barclays Blue Rewards

While my First Direct switch trundled slowly on, Barclays launched an unexpected and rare bank switching deal, paying £175 to anyone who switched to its current account and signed up to its £5 a month rewards scheme. The deal was launched in July and closes on August 30 and is one of the first Barclays has done.

Despite our earlier Barclays accounts, which had supposedly been closed after the first switch, the terms and conditions made us eligible, so I attempted to open a Barclays account for a second time.

This precipitated a technical glitch in the Barclays app because – a spokesman later explained – the earlier account had not been closed properly at the time and this created problems with authentication.

Although the account opened successfully, I was unable to access it at all, despite possessing a new account number, sort code and debit card.

The process quickly became Kafkaesque – twenty minutes trying to get through to a human on the Barclays phone line only to be told that the PIN that I needed to access the account was only available within the app which I could not access.

Eventually the bank agreed to send it by post, but a week later it had still not arrived. It eventually arrived after ten days and I am now poised to switch this account as soon as my First Direct bonus arrives.

A spokesman informs me that this technical glitch has now been sorted so it won’t happen to other bank users, but it has not filled me with confidence. Paul hasn’t attempted this one yet, perhaps unsurprisingly given my experience.

Account opening experience: 1/10 (initial success leading to frustration)

Cash bonus: £175

Other perks: The account costs £5 but this cost is wiped out if you have two direct debits set up on the account. You can also get Apple TV.

Winnings and lessons

Provided that the final bonuses we are waiting for are paid out as expected we should end up with more than £1,300 in switching perks by September, while the charities we selected for our direct debits have benefitted too.

Our bank switches themselves proceeded smoothly, and our direct debits were paid out every month without a hitch.

That’s the good news.

The bad news is that I’ve spent well over an hour on the phone to different banks sorting out technical problems.

I’ll also be keeping a closer eye on my credit report, which dropped 103 points due to my bank switching antics, as every bank did a credit search before allowing me to open an account.

Companies begin to worry when they see lots of credit searches, as it looks like you need lots of credit. This pushes your score down.

Switching banks repeatedly is not advisable if you are about to take out a mortgage or other loan, so those who want to bag similar bonuses to mine should bear that in mind because of the credit score.

Delays are another hurdle. Glitches and Royal Mail delays are annoying if accessing your cash isn’t critical, but if you can’t get into your main account to pay your bills then it could be a far more serious experience.

Though the account switching guarantee promises to make losses good, I suspect it would be a stressful experience if mistakes with payments were made.

Even for £1,000, I wouldn’t risk that.

Bonuses available now

• £175 for switching to Barclays as above
• Up to £190 to switch to TSB - £100 first then £90 in instalments
• Up to £160 to switch to the Co-op Everydag Extras account - though this is a paid-for account that will eat up some profit and the deal ends Saturday.

Check the best cash Isa rates in our savings tables