Martin Lewis explains why now is the time to switch bank accounts

There's a glut of free money to be had

It's Friday, which can only mean one thing – time for another of Martin Lewis' fabulous money-saving tips. On his regular This Morning slot, he had some great tips – including how to get free eye tests and pointing out that now is a great time to book your train tickets for Christmas.

Related: Martin Lewis says THESE are the best broadband deals and THIS WEEK is the time to switch

However, we were all ears when he started talking home finance, and why now might be a good time to reconsider who you're banking with.

Lloyds bank account switch

Martin Lewis with blue suit and white shirt

(Image credit: Getty Images/Stuart C. Wilson/Stringer)

'Lloyds has entered the bank switching war,' Martin annouced. 'New switchers to Club Lloyds will be paid a free £125 plus one of three benefits. You can either get one of six 2D Due or Cineworld cinema tickets, a magazine subscription, or a Gourmet Society membership.'

'Now you need to pay in £1,500 a month or there's a £3 a month fee. It just means paying your salary in as long as it's more than £1,500.'

The main benefit of Club Lloyds is that it pays a reasonable amount of credit interest on your account. You will receive 0.99% annual gross interest for balances up to £3,999.99, and 1.98% annual gross on any part of the balance from £4,000 to £5,000.

But as Martin says, it also pays to shop around. 'That £125 is beatable though by HSBC, RBS and NatWest all give more. And while First Direct only gives £50, has better customer service.'

Martin is – of course – right. HSBC will pay £175 if you switch to its Advance bank account. RBS is handing out £150 to anyone that switches to its fee-free everyday Select account, and we previously reported on a great NatWest deal...

NatWest bank account switch

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(Image credit: Future PLC/Ti-Media)

‘NatWest has joined the bank switching war, they are now bribing you to switch to them,’ the MoneySavingExpert explained on This Morning in September.

‘It is a legal bribe so take it!’ he adds. ‘And its sister bank RBS will pay you £150 if you switch to any of its accounts.’

When it comes to switching to a NatWest account, Money guru Martin Lewis suggests switching bank account to the reward account. There is a £2 free, but you get 2 per cent cashback on household bills paid by direct debit.

The Natwest website says that on average it’s Reward customers earn £83 a year in Rewards based on monthly bills of £345. Paying the bills will never have felt so good.

The only catch is that you have to pay in £1,500 a month to the account. If that sounds like a lot, it means that you will need a salary of £21,500 a year. You will also need to make sure all of your salaries are paid into the one account.

‘If you don’t want to pay the monthly fee, there is a standard newest model, fee-free,’ explains Martin Lewis.

The everyday bank account is made for simple day-to-day banking. It comes with an easy to use mobile banking app, contactless Visa Debit Card, and that all-important £150 when switching bank account from your current account. 

bathroom with textured wall and walled photos frames

(Image credit: Future PLC/Rachael Smith)

To qualify for the £150 cashback you will need to apply and open a new account or switch into an existing account by the 6th December 2019. You will also need to pay in at least £1500 by 24th January 2020.

After that, all you need to do is wait for the £150 to be paid into your NatWest account. This will be done by 21st February 2020.

Related: Martin Lewis says you get the best rates with THIS new savings account

Martin has long championed bank switching. He's noted that many people  simply stick with the account they opened when they got their first job, but you'll almost definitely be losing out by doing so.

With Christmas just around the corner, a £125-plus boost could be very handy, whether it's for buying gifts or giving your home a decorating update. Maybe the downstairs loo needs a little wallpaper refresh or you could do with new cushions and curtains for the living room. Switching bank accounts could give you the little extra you need to get the job done.

'All we know, all these deals mean this is a good time to switch bank account and get paid for it,' Martin concludes.

Amy Cutmore

Amy Cutmore is an experienced interiors editor and writer, who has worked on titles including Ideal Home, Homes & Gardens, LivingEtc, Real Homes, GardeningEtc, Top Ten Reviews and Country Life. And she's a winner of the PPA's Digital Content Leader of the Year. A homes journalist for two decades, she has a strong background in technology and appliances, and has a small portfolio of rental properties, so can offer advice to renters and rentees, alike.