In a recent poll, we asked you what would persuade you to move your current account and 31% said a better return on balances in credit, while 19% said a cash incentive. Well, what about both?
moneysupermarket.com can bring you an exclusive offer on the Halifax Reward Account. This is a leading deal for those who run their current account in credit and you’ll also receive £50 cashback if you apply through moneysupermarket.com.
Read on to find out if this is the account for you…
What’s the deal?
This is a really interesting current account proposition because, rather than paying an annual rate of interest on in-credit balances, customers receive a monthly ‘reward’. As long as you pay £1,000 or more into the account each month, you’ll get £5 credited to your balance.
Over the course of a year, that means you’re guaranteed to earn £60 on the money in your current account regardless of the amount you keep in your account.
What’s more, Halifax is also offering new customers who switch to this account £50 cashback. This promotion is only available via moneysupermarket.com, though - you won’t qualify for the cashback if you apply directly with Halifax or through any other comparison website.
You can apply online and, like many of the main high street banks, Halifax has a dedicated switching team so the transfer of direct debits and standing orders from your existing current account will be done for you. It takes about a month for everything to be moved across.
New customers benefit from a free overdraft for 120 days – this is a buffer in case payments begin going out of your new account before money has started going in.
Are there any catches?
While this is a great deal if your current account is in credit, it’s not a good option if you are regularly overdrawn.
You’ll be charged £1 a day for going overdrawn and that’s assuming the overdraft is authorised and that you don’t go into the red by more than £2,500. The daily charge rises to £2 a day for authorised borrowing above £2,500 and if you go overdrawn without permission you’ll be charged £5 a day. The cost of going overdrawn could therefore easily run into hundreds, if not thousands of pounds over the course of a year and there are other current accounts which are far cheaper if you are a frequent overdraft user.
In order to qualify for the £5 reward you must pay at least £1,000 into your account each month.
This is a great account but on the face of it many people may not appreciate just how good a deal it is. There are a number of other competitive current account offers but they’re only one-year offers or require you to keep a high balance in your account in order to beat the return you get on the Halifax Reward account.
If you’re like me, your salary goes in to your current account at the beginning of the month but then, because of all the direct debits and standing orders that go out, there’s not much left by the end. Therefore, if you have an account that pays an annual rate of interest, you may not earn that much over a year (and most people have accounts paying 0% or 0.1% so they get practically nothing). With this product though you’ll get £5 every month as long as you meet the minimum funding requirement of £1,000 – so even if you have just a few pence left by the end of each month, you’ll still earn £60 a year. And in year one, the exclusive cashback offer, means you’ll get £110.
However, while this will be a great deal for many people, it isn’t the current account for everyone.
When it launched the Reward account last year, as well as ditching annual in-credit interest, Halifax also scrapped charging an interest rate on overdrafts. Instead, it introduced the overdraft fee structure which it has since rolled out to all its current accounts.
Charging a daily fee makes it much simpler to understand what going overdrawn will cost you. However, in comparison with many other current accounts Halifax’s fees make it one of the most expensive banks to have an overdraft with. If you occasionally slip into the red for a day or two, you don’t need to worry as the £5 monthly reward will offset the fees you incur. Any more than that though and this is an account to avoid.
If you don’t use an overdraft and think this is the right account for you, click here to apply.
Don’t be put off switching current account – the process is much simpler than many people expect because your new bank will arrange the transfers of your direct debits and standing orders. However, before you sign up for a new account make sure it’s the most suitable.
Think about how you use your account – do you need an overdraft? What about extras such as travel insurance and breakdown cover – it might be worth paying a monthly fee if you’d use the benefits some accounts offer. Are you happy to bank online or is branch access important? And what about telephone support and customer service – some banks offer 24-hour service, others don’t.
The current account market is more varied than many realise so it’s well worth doing a bit of research to find the best deal for you.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.