Marks and Spencer revamps bank account for savers, should YOU switch?
HIGH street favourite Marks and Spencer (M&S) has added extra benefits and rewards to its current account in an effort to tempt customers away from the traditional big banks - but there are a few catches to watch out for.
Should you switch to an M&S bank account?
People who switch to an M&S current account will now receive a £100 gift card, plus £10 a month to spend at the brand for a year.
Customers also have exclusive access to a six per cent monthly savings account, paying up to £96 of interest over a year if the maximum £250 is saved each month.
It means the account offers £316.63 of money to spend in M&S or through interest, which is more than can be earned over a year through any other current account.
Paul Stokes, head of products at M&S Bank, said: “We want to make banking with M&S as rewarding as possible, so we’re delighted to be able to welcome new customers with a £100 M&S gift card, and the potential to receive a further £120 in the first year they bank with us.”
However, you need to pay in at least £1,000 a month into the account to qualify for the £10 spending, and use the current account switching service with two active direct debits to receive the gift card.
Needless to say, the bank is most suited to people who are regular M&S customers.
Savers have a number of current account options that have the potential to provide more pure cash income than M&S's offer.
Savers can get bigger rewards by switching bank accounts
M&S is trying to lure in new customers with rewards
For example, switch to First Direct and you will be rewarded a £125 cash bonus, plus you can earn another £117 through the bank's six per cent regular saver, if you put away the £300 maximum each month.
At the end of the year, you could have earned a total of £242 in cash.
Another option is TSB, which pays five per cent on in credit balances up to £2,000, making a potential £102 of interest available each year.
The account also has a regular saver that pays five per cent on up to £250 saved each month paying up to £81.02 over a year.
Furthermore, the account gives five per cent cashback on up to £100 of contactless debit card spending each month, earning another £60 a year - from all three you can earn up to £243 in cash.
For savers with a larger cash balance of £12,500 or more, Santander's 123 current account is a good option, which pays three per cent on balances up to £20,000 - though the account features a £60 a year fee.
Andrew Hagger, money expert at Moneycomms, said: "A fiercely competitive UK current account has seen an increase in the use of incentives and rewards by banks and building societies to win new customers.
"Initial switching payments of between £100 and £150 have become more prevalent in recent years but we’re also now seeing more banks turning to a rewards package subject to signing up for an account with a monthly fee."