17:56 18 November 2012
We often keep our eyes peeled for great new deals on savings accounts and credit cards, but rarely stop to think about the benefits that a new current account could bring. But as well as potentially benefitting from improved customer service and overdraft terms - you could even be rewarded just for making the switch.
For example, if you move your main bank account to First Direct's 1st Account through MoneySupermarket, you can now pocket £125 for your efforts. Here we take a closer look at the exclusive offer to see whether it's worth taking up...
What's the deal?
The £125 cashback deal is exclusive to MoneySupermarket though you can receive £100 cashback if you go to the bank direct.
To qualify for either windfall, you must pay in at least £1,500 a month to the 1st account or otherwise a £10 monthly fee will be charged.
If you have a related account with the bank however, such as a mortgage or savings account, you will not be charged the fee.
While you will not earn any interest on credit balances at all, if you are looking for a moderate overdraft, the 1st account could be ideal. You will automatically be offered £500, the first £250 of which is interest-free. And if you borrow any more than this, interest is charged at a relatively competitive annual percentage rate (APRP) of 15.9%.
A major perk of switching to the 1st account is that you will immediately qualify for the bank's Regular Savings Account which pays a massive 8.00% interest. This savings account requires you to pay in between £25 and £300 a month with interest being paid on maturity.
First Direct also promises superior customer service with round-the-clock advisors who actually pick up the phone by hand and speak to you - and the bank was named Best Overall Provider in the 2011 MoneySupermarket Supers Awards. In fact it is so confident you will be satisfied with the switch, if this isn't the case in six months' time, it will give you a further £100 and help you to move your account elsewhere.
The 1st account can be accessed online or by telephone. And if you have an iPhone or iPod Touch, you can use the banks mobile banking apps.
First Direct's 1st account won't be suitable for everyone, as to qualify you need to be able to pay in at least £1,500 each month. Failure to do this would result in you being charged a fee of £10 per month, unless you want to set up another account alongside it as we have mentioned.
Another potential downside is that the 1st account can only be operated by phone or online. This means if branch access or speaking to someone face to face is particularly important to you, the account may not be up your street.
Finally of course, the 1st account doesn't pay interest on credit balances; therefore if you have cash to stash in your account, you may want to consider shopping around for another alternative.
You can read more about the current accounts that provide handsome returns in Melanie Wright's article, When is a current account better than a savings account?
The offer also won't last forever, so you will need to make the decision to switch fairly quickly.
What's the verdict?
If you tend to have regular contact with your bank, are looking for a great regular savings account and value customer service above factors such as credit interest, then even without the £125 incentive, switching to First Direct could really pay dividends. But it is also of course a very welcome start to the new home for your cash.
If you are put off the idea of switching because you think it is going to be complicated, then you might be surprised. First Direct offers a dedicated Easyswitch service to make sure the process is smooth and hassle-free. It will transfer all your standing orders and direct debits and assist you with transferring your income or salary into your new account.
And if, for any reason there is any failure in the switching process, the bank promises to refund any charges or interest you have paid to it.
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