First Direct: bank relaunches £175 current account switch cash offer, how to claim rates - debit card criteria

First Direct is re-offering its £175 cash-to-switch incentive for current accounts for a second time, at a time when many comparable offers have disappeared from the market.

The bank said there was a notable uptake in the offer during the incentive's initial four-week launch in late March.

But how exactly does the offer work, and do you need to do anything to be eligible to claim the incentive? Here is everything you need to know about it.

How do I get £175?

Customers must fulfil specific requirements in order to be eligible for the £175 bonus.

These include switching at least two regular payments, transferring a £1,000 balance into the account and using their debit card at least five times in the first 30 days after opening the account.

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To receive the incentive, customers must also not previously have held a First Direct product or opened an HSBC current account on or after 1 January 2018.

Switchers must go through the full Current Account Switch Service (Cass) process to transfer their everyday banking to receive the £175.

Customers can expect to receive the bonus by the 20th of the following month of meeting the criteria, First Direct said.

The bank has not given a date for when the £175 switching incentive will be withdrawn. Chris Pitt, chief executive of First Direct, said the £175 offer “will only be around for a limited time only”.

Read more: The best UK current account banks to switch to - including Barclays and Halifax

‘Competitive’

The latest offer from First Direct could pave the way for more new switching offers to be launched in the current account market.

Last week, Virgin Money launched a new current account switching offer, giving switchers to Virgin Money’s current accounts – the Virgin Money M Account, M Plus Account and Club M Account – a bonus interest rate of 10% gross fixed on current account balances up to £1,000 for a year from July 1 2024 to June 30 2025.

Website Moneyfactscompare.co.uk recently said several other banks, including NatWest, Lloyds Bank and Santander, had ended offers of cash to switch. Some banks had been offering as much as £200.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “After a short absence, First Direct has reintroduced its £175 switching cash offer, which may entice consumers looking for an upfront sweetener.

“The fuss-free 1st Account may be suitable for those who use their overdraft from time to time, thanks to its £250 interest-free buffer. Not only this, but those looking to kick-start the savings habit will have access to its regular savings account which pays a competitive 7%.”

What to consider when switching current accounts

Evaluate the ease and convenience of the switching process. Many banks offer a switching service to transfer direct debits, standing orders, and incoming payments from your old account to the new one seamlessly. Confirm whether the new bank provides this service and inquire about any associated timelines.

Consider the features and benefits offered by the new account, such as overdraft facilities, interest rates, mobile banking apps, and customer service quality. Ensure that the new account meets your financial requirements and offers additional value compared to your current account.

Review the fee structure of the new account, including monthly maintenance fees, overdraft fees, ATM charges, and transaction fees. Calculate the potential cost savings or additional expenses associated with the new account to determine its overall value.

Look beyond the initial cash incentive and assess the long-term benefits of switching to a new bank or building society. Consider factors such as ongoing rewards, loyalty programs, interest rates on savings accounts, and customer satisfaction ratings.

John Dentry, product owner at Pay.UK – owner and operator of Cass, said: “Cash incentives continue to be a highly effective way for banks to attract customers, but as we repeatedly see through our data, online or mobile app banking remains the top reason why people prefer their new account.”

Research customer reviews and the reputation of the bank or building society before making a decision. Look for feedback on customer service quality, reliability and satisfaction levels to gauge the overall experience of banking with the institution.

Carefully read the terms and conditions associated with the new account, including any eligibility criteria for cash incentives or promotional deals. Pay attention to any minimum deposit requirements, account maintenance rules and conditions for receiving the bonus.