Switch now – and enjoy your share of £5BILLION

AN extra £5billion a year is on offer to millions of people who have yet to switch to a bank account paying interest.

Figures from the Competition and Markets Authority show that there are more than 48million accounts with an average net balance of nearly £3,700. But of all the main accounts held by customers, only 15 per cent pay interest.

If the remaining 85 per cent of accounts earned 5 per cent interest on a £2,500 balance, as offered by Nationwide Building Society’s FlexDirect account, £125 would be added to each, before tax, in one year. It is possible to open a new account without ditching the old one – for those fearful of the consequences of switching.

But care should be taken to ensure they meet any rules such as minimum monthly payments into the new account.

For those happy to switch their main account and dump the old, using the Current Account Switch Service is best. Ask the new bank to use the service, fill in the paperwork – or online forms – and then wait for the bank to do everything else.

Additional guarantees come with this service – including a refund from the new bank if anything goes wrong resulting in a penalty. For more information visit simplerworld.co.uk.

Accounts that pay interest include Halifax’s Reward Current Account, with £100 for switching and £5 per month for staying in credit.

Club Lloyds pays between 1 and 4 per cent on balances up to £5,000, while Nationwide Building Society’s FlexDirect pays 5 per cent for up to £2,500.

Santander offers between 1 and 3 per cent on balances up to £20,000 and cashback on everyday bills. Tesco Bank also pays 3 per cent, but on balances up to £3,000.

Clydesdale and Yorkshire Banks pay 2 per cent on balances up to £3,000 and £150 for joining.

TSB, which has unveiled the new 555 Classic Plus account, pays 5 per cent interest on balances up to £2,000, 5 per cent cashback on £100 of spending on a contactless debit card each month and 5 per cent on its linked monthly saver account.

The maximum up for grabs from TSB is nearly £239 in a year.

But there are also accounts recognised for stellar customer service. First Direct fits into this category.

It does not pay interest but is offering a £150 ‘golden’ hello to people who switch via comparison website MoneySuperMarket.