Switch bank account and make up to £266

Many savings accounts pay next to nothing but there are ways to earn decent returns, says

If you’re one of the millions of savers with cash idling in a high street bank it’s time to dump that bank and get a better rate. For example, HSBC’S Flexible Saver pays just 0.05pc – and this is after an increase following the Bank Rate rise in November.

However, if you use current account switching offers, joining bonuses and high-interest accounts you can make up to £266 by moving.

Here we explain where you should move your cash, and how.

Ditch and switch to a new current account

A number of providers offer generous switching incentives to new customers who transfer using the Current Account Switch Service (Cass), an industry-wide scheme.

First Direct offers a cash bonus of £100. Its account costs £10 a month, but this fee is waived for the first six months if you pay in £1,000 a month, maintain a monthly balance of £1,000 or hold another selected First Direct account, credit card or mortgage. The account does not pay interest.

If you’re not happy with First Direct, it promises to pay another £100 if you leave after six months but before a year. You could then switch to another current account provider using the Cass.

Marks & Spencer Bank offers customers an M&S gift card worth £185 if they switch with two direct debits and stay with the bank. You’ll get £125 initially, then £5 will be added to the card in each month you credit the account with £1,000 and keep the direct debits active. This will carry on for 12 months. Halifax gives new customers £75 within seven days if they switch.

There are also a number of highinterest current accounts that don’t offer a bonus but offer decent interest. For example, Nationwide’s Flexdirect account pays 5pc on balances up to £2,500 for the first year – amounting to £125. Customers must pay in £1,000 a month. Tesco Bank pays 3pc on balances of £3,000, or £90 in a year.

Take advantage of regular savings accounts

If one of your New Year’s resolutions is to save a bit more each month then consider a regular saving account – picking the right one could net you £196.

Regular savers pay some of the highest rates on the market – up to 5pc on small monthly sums. You usually can’t access your cash for 12 months and you’ll probably need to open the provider’s current account too.

First Direct’s regular savings account pays 5pc on monthly deposits of between £25 and £300. This rate is paid for 12 months and will earn you interest of up to £96. So if you switch to the current account and open the regular saver you’ll earn £196 after a year if you fulfil the account criteria above.

M&S Bank also offers current account holders access to its regular saver, which pays 5pc if you switch using the Cass and keep two direct debits active. Up to £250 a month can be saved into the account for a year.

This would yield up to £81 by the time the term ended, in addition to the £185 in M&S spending you would have earned – a total of £266.

Nationwide and Santander also offer regular savers that pay 5pc to some current account customers.

Look at smaller providers

There has been a spate of new online-only banks emerging over the past few years offering table-topping rates. But many savers still put their trust in the “bricks-and-mortar” high street providers rather than opt for the unknown.

Your money is protected as long as the bank is authorised and regulated. Up to £85,000 held per institution is covered by the Financial Services Compensation Scheme.

Investec, a specialist bank launched in South Africa in the early Seventies, offers a top one-year bond that pays 1.85pc on minimum balances of £25,000. A one-year fixed-rate bond from Nationwide yields just 0.75pc.

Paragon Bank’s two and five-year bonds pay 2.05pc and 2.5pc. These are market-leading rates. RBS offers just 0.8pc for two years on balances between £5,000 and £49,999.

Access Bank UK, the British subsidiary of a Nigerian Bank, offers a top three-year bond that pays 2.25pc. All these banks are FSCS protected.

The top saving rates have been rising over the past year, fuelled by competition between the newer banks. Tom Adams from Savings Champion, the specialist savings service, said there was no reason to believe this would change in 2018.

He said these less-established providers were likely to boost their lending books by attracting customer deposits through offering higher rates.

Poor returns: rates at traditional high street banks are often miserly