HSBC bids to lure in current account customers with £140 switching bribe

HSBC is dangling a £140 cash carrot in a bid to lure in new current account customers.

The banking giant is offering the cash bribe to those who switch to its Advance account using the Current Account Switch Service and taking with them at least two direct debits or standing orders.

New customers can also apply through MoneySuperMarket without the need to use CASS, although anyone tempted will need to act fast, as the offer ends on Thursday 19 August.

HSBC lost 26,743 current account switchers compared to the 23,892 it gained during the first three months of 2021, according to official figures. 

One obstacle switchers need to overcome is that they will need to pay in at least £1,750 each month or £10,500 every six months to be eligible.

Michelle Stevens, deputy editor at personal finance comparison site Finder, said: ‘HSBC’s switching bonus is certainly generous by current standards, but you should read the fine print carefully before deciding whether it is the right deal for you.

‘In order to get the bonus, you need to pay £1,750 into the account each month, which is a significant amount of money.

‘If you don’t think you would be able to do this then it would probably be better to wait for a more accessible deal to come along.’

Those who switch to HSBC will also be able to open a regular savings account in which they can stash away £25-£250 each month and earn 1 per cent interest.

Although 1 per cent interest is not bad given that the average easy-access savings rate is 0.18 per cent, according to Moneyfacts, it is still possible to to better.

Stevens added: ‘Even if you paid in the maximum amount allowed of £250 per month (£3,000 per year), you would only earn interest of around £16.’

Should you apply?

More than 7.3 million people have now switched their bank account since 2013, according to figures from the CASS.

There are often benefits and incentives to be reaped from switching as banks compete for current account customers and £140 is certainly eye-catching.

With 213,000 Tesco bank customers needing to find a new bank by 30 November this might be particularly tempting to them.

Over the course of the past year, from June 2020 to June 2021, a total of 646,569 switches were processed by the Current Account Switch Service

But whilst cash incentives can be a big draw, it is important to consider the other factors that make switching worthwhile.

Customer service, overdraft limits, interest rates, cashback, saving perks and other niche benefits such as cinema tickets are all factors that count for something.

Starling Bank, for example, which made a net gain of 17,769 switchers between January and March, according to the CASS figures, doesn’t offer incentives to switchers, instead relying on the strength of its customer service and its app.

Virgin Money, which secured a net gain of 17,495 switchers during that period is currently 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.

Customers worried about dipping into their overdraft each month might be more tempted by switching to First Direct and benefiting from having the first £250 of any overdraft borrowing being interest free.

Andrew Hagger, founder and director pf personal finance website, MoneyComms said: ‘Don’t simply switch for the cash bribe – ask yourself if the account really suits the way you run your day to day banking – if you often go into overdraft for example, then there are cheaper deals to consider.’