£200 to switch bank to Lloyds (but beware the catch)

LLOYDS Bank has recently entered the current account switching battle by launching a £200 cash bonus to lure in new customers.

But despite offering the biggest cash reward for switchers, one expert warns that it is unlikely to be a worthwhile deal for most people.

That’s because the bonus is only available for those opening one of its premium accounts.

These accounts offer add-ons such as breakdown cover and travel insurance — but also charge a monthly fee.

Andrew Hagger, of research site MoneyComms, says potential switchers must do their homework before being tempted.

‘These accounts are not worth going for unless you use the insurance benefits.

‘If you go on holiday a few times a year, then it could be worth considering for travel insurance, or for breakdown cover if you have a car. But I wouldn’t jump into signing up just because £200 is being dangled in front of you. By the end of the year, you could have spent that in fees.’

To receive the bonus, customers must switch from another bank to a Lloyds Silver Account or Platinum Account before March 20 using the Current Account Switch Service.

The Silver Account offers UK and European travel insurance up to age 65, mobile phone insurance and AA breakdown cover, but costs £10 a month.

The Platinum Account has worldwide travel insurance up to age 80 and breakdown cover, but costs £21 a month.

Club Lloyds Silver and Platinum are also included in the offer, which allow holders to earn interest on balances up to £5,000.

But bolting to Club Lloyds costs an extra £3 a month on top of the other fees — although this £3 is waived every month a customer pays in £1,500 or more.

First Direct currently offers £175 to switch to its free current account.