Young savers need to be speedy if they want to earn free money for switching their current account – genuinely good deals don’t hang around for long
by Iona Bain
So I knew that the Co-op were onto something last week when it launched a sensational offer to tempt new customers.
It was offering a massive £200 to anybody that switched to any of its current accounts.
Unlike other promotions from banks, there really seemed to be no catch.
You didn’t have to be a member of the Co-op and you didn’t need to have any products with the mutual to qualify, unlike the seemingly fabulous switching rewards on offer from Santander.
The Spanish bank is only offering a full £300 to new current account customers who already have a savings account or mortgage with the bank. Let’s face it, few young customers will find themselves in this position.
The only other bank offering a comparable deal is First Direct, the acclaimed internet bank that has launched an all-out publicity blitz to lure in new savers and will give you a lower £100.
And one of the Co-op current accounts was actually worth switching for: hallelujah!
The Current Account Plus is free to use – no small feat, when you consider that 40% of us consumers now pay a monthly fee for our current accounts. Plus, it has a £200 overdraft, which could be a lifesaver if you have to dip into the red. Graduates will particularly welcome this safety net when they are used to the generous borrowing terms of their student accounts.
I think there is a lot to be said for the Co-op’s broad aims as well. At a time when Occupy Wall Street protests have spread to the UK, it’s clear that our more ethical institutions are going to strike a chord with a young population disillusioned with our principal banks’ appalling antics.
Only recently, Amnesty International revealed that RBS, bailed out during the recent recession by British taxpayers, has funded companies that make cluster bombs to the tune of $80 million. Stephen Hester, chief executive of the bank, was bombarded with more than 10,000 emails from outraged members of the public. Only then did the bank feel a pang of guilt and cut all ties to cluster munitions firms.
HSBC and Barclays were also accused of giving loans and managing assets in order to “profiteer from the slaughter of civilians”.
Pretty horrible stuff, I’m sure you’ll agree. And that isn’t even considering the direct and indirect roles played by our banks in causing our current mess, which is hurting young people the most. Record youth unemployment, a dearth of first-time buyers, rocketing tuition fees – you know the story.
So I was pleasantly surprised when this offer came along, as it was actually as good as it seemed and came from a bank that was prepared to shun morally questionable investments. But I never imagined that this deal would prove so popular that it would be all but pulled 5 days after it was launched!
The offer received so many applications, it became oversubscribed, so it is no longer open to those who would like to use the current account online or over the phone. I would imagine this is how most tech-savvy people my age would like to do their banking now; according to recent research from Nationwide, the majority of all customers like to go manage their finances online because of privacy, convenience and getting away from dreaded queues in fusty old banks.
Unfortunately, the offer from the Co-op is now only available if you want to use the current account in-branch, which isn’t ideal for busy youngsters on the go.
But how did I find out it was closed? Because I applied for the account myself. I wasn’t necessarily unhappy with my previous current account, don’t get me wrong, but I couldn’t turn down the offer of free cash when the current account on offer from the Co-op seemed like a perfectly good alternative.
I am sure many young readers would have also given this deal the thumbs-up. So I would be very curious to know how many of the successful applicants for this deal were under the age of 30.
I don’t think we’ll ever know. But I wouldn’t mind betting that lots of young people will have missed out if they didn’t keep an eye on the money pages in newspapers or financial websites.
Unfortunately, so many aren’t taught about the importance of personal finance at school or equipped with the basic knowledge to manage their money, let alone discern what the best deals are on the market. Much more should be done to finesse their knowledge in this area, so I heartily support education initiatives from the likes of Nationwide which aim to enhance young people’s financial know-how.
But it just goes to show that you have to be incredibly proactive to find the best deals; they won’t come looking for you.
This is a classic example of early birds catching the worm, so act fast if you see a good deal because you don’t know how long it’ll hang around for.