Focus on: EXCLUSIVE! Grab £125 for switching to First Direct

Although many of us regularly search for the best deal on our savings account, insurance or credit card, it's easy to forget about our current accounts – and yet this is probably the part of our finances we use the most.

But if you haven't switched your current account in several years, you could be missing out in a big way. That's because there are a number of great deals to be had right now.

One of them is the First Direct 1st Account, which is currently offering a tasty £125 if you switch to the account via MoneySupermarket.

However, you'll need to act quickly as this deal is only valid until April 30, 2013. Here, we take a closer look at whether this account is right for you.

What's the deal?

First Direct has upped the cashback amount customers will receive for switching to its 1st Account by £25 to £125, providing they apply via MoneySupermarket and haven't previously held an account with First Direct.

To qualify for the cashback you will need to pay £1,000 into the account each month. But the good news is this has fallen from the previous £1,500 a month. You will also need to transfer at least two direct debits and/or standing orders within three months of the account being opened. The bank's EasySwitch service will make this easy to do and once this is complete, the £125 will be paid into your account.

You can open the 1st account individually or jointly. If you open a joint account, the £1,000 a month doesn't have to come from one partner only. For example, you could pay in £500 and your partner could pay in £500.

You won't earn interest on credit balances in the 1st Account, but you will be able to enjoy a £250 interest-free overdraft if you slip into the red. Go over this and you'll be charged an annual percentage rate (APR) of 15.9%.

Another bonus of the account is that First Direct is renowned for its excellent customer service. But if you still decide you're not happy, you will be given another £100 if you choose to close the account within 12 months (providing you have paid in at least £1,000 for the past six months).

Who's it good for?

The First Direct 1st Account is a great option for anyone who hasn't switched current accounts in a number of years and who fancies making a little bit of cash fast. It's also a good choice if you're fed up with your current bank's poor customer service as First Direct has a long-standing reputation for excellent customer service, employing professional staff based in UK call centres.

The account is also well worth considering if you currently have a small overdraft that's charging hefty fees or interest.

Any catches?

One of the potential catches with the 1st Account is that, after the first six months, there is a £10 monthly fee to pay if you don't fund the account with at least £1,000 a month. However, if you can't afford to do this, you can also avoid paying the fee if you open another financial product with First Direct.

But be aware you must choose a product from a selected list and the Regular Saver which pays 6.00%, is not included in this list.
If you're always in the black, another catch with the account is the fact it doesn't pay interest on in-credit balances. As a result, you could be better off choosing an account that will give you interest – fortunately, there are now a number to choose from.

For example, the Nationwide FlexDirect Account pays a fantastic annual equivalent rate (AER) of 5.00% fixed for 12 months on balances up to £2,500. You'll need to pay £1,000 a month into the account to qualify and once the 12 months are up, the rate falls to 1.00%.

Alternatively, you can earn £5 a month with the Halifax Reward Current Account, providing you pay in £1,000 each month. You'll also receive £50 for switching to the account.

Or, if you don't mind paying £2 a month for your account, the Santander 123 Current Account pays 1.00% on balances from £1,000, 2.00% on balances from £2,000 and 3.00% on balances between £3,000 and £20,000. On top of this you'll get cashback on some of your direct debits on the account. You'll earn 1.00% cashback on your water bills, council tax bills and Santander mortgage payments, 2.00% cashback on gas and electricity bills and 3.00% cashback on mobile phone, home phone, broadband and paid-for TV packages. You will need to fund the account with at least £500 a month.

If you need a larger overdraft than the £250 fee-free overdraft that comes with the First Direct account, there are again other options to consider. The Nationwide FlexDirect Account, for example, offers a fee-free overdraft (subject to approval) for 12 months, although after this you'll pay a daily charge of 50p on arranged overdrafts of £10 or more.

Finally, the 1st Account can only be operated online or by phone. So if you don't like the idea of not being able to have branch access, this may not be the current account for you.

What's the verdict?

The First Direct 1st Account is a great current account to choose if you put customer service above everything else. If you're fed up with the customer service you're receiving at your existing bank, it really could pay to switch.

The £125 cash incentive should also encourage many people who haven't bothered to switch their current account in the past to make the move.

What's more, First Direct's Easyswitch service is designed to make the process of switching to the 1st Account hassle-free. The bank will take care of switching your standing orders and direct debits over to the account, as well as transferring your income or salary.

Should there be any problems with this switching process, the bank promises to refund any charges or interest you've paid it.

Top tip!

By switching to the First Direct 1st Account you will automatically qualify for the First Direct Regular Saver which pays a competitive 6.00% AER fixed for 12 months. The account allows you to save between £25 and £300 a month, so it's ideal for those who need to get into the savings habit.

If you saved the maximum £300 each month, you'd have £93 in interest after basic rate tax after a year. Be aware that you can't access your money during the 12 months.

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.

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