The 10 banking hacks to make YOU hundreds of pounds – from free cash to hidden rewards

MAKING a few simple changes to how you bank could leave you thousands of pounds better off over time. From switching current accounts in exchange for cash bonuses to moving to savings accounts paying top rates, there are plenty of easy ways to boost your finances. Rachel Springall from Moneyfacts explains how you can get more out of your bank Delving in to your banking app can be a great way to find perks and handy functions you may have missed Credit: Getty Some banks are offering switching bonuses of over £200 while other current accounts pay cashback potentially worth hundreds of pounds a year. Meanwhile, certain accounts offer freebies like travel or contents insurance, which could be worth hundreds of pounds a year. Sign up for the Money newsletter Thank you! And simply completing popular savings challenges with the help of your banking app could see you put away up to £2,000 over 12 months. Rachel Springall, finance expert at Moneyfactscompare.co.uk, said savers should make sure they are getting as much as possible from their bank and switch if a rival is more competitive. “The most suitable current account is not just about the rewards, it’s whether it has all the additional benefits someone needs to save money, like insurance policies or breakdown cover, which you can get on many packaged accounts,” she said. Rajan Lakhani, money expert at Plum, added: “A few small but smart changes can make a huge difference to your savings. It’s worth investigating all the tools available from your banking and finance apps to optimise your finances.” Sun Money has rounded up some simple banking hacks that could leave your finances better off. Bag over £200 for switching banks Simply switching banks could earn you hundreds of pounds Credit: Bloomberg via Getty Images One of the quickest ways to make some extra cash is to switch your current account. Most read in Money A number of major banks are currently offering customers hefty sweeteners to switch their current account to them. HSBC is offering £220 to eligible customers who switch to its Bank Account using the Current Account Switch Service (CASS). You’ll need to move at least two direct debits, pay £2,000 into the account and spend £500 on your debit card within 60 days to qualify. NatWest is offering £200 to eligible customers switching to its Select or Reward accounts. Customers need to pay in £1,250 and log into the NatWest mobile banking app within 60 days. Meanwhile, Nationwide and first direct are both offering switching bonuses of £175. The Co-operative Bank is offering up to £200, consisting of £125 upfront and an additional £25 a month for three months if customers continue to meet the criteria. Ms Springall said: “If someone is looking to switch, it’s worth noting that a variety of current account providers are paying lucrative free cash offers right now, so that’s worth keeping in mind if using the CASS.” CASS moves regular payments such as direct debits and standing orders from your old current account to your new one automatically, so you don’t need to do any extra admin for switching. Always check the full eligibility criteria before changing banks and make sure the new account suits your needs rather than choosing it solely for the cash bonus. Get paid for everyday spending Some banks offer cashback through their current accounts for spending Credit: Getty You could also earn money back on purchases and bills you were going to pay for anyway. Some banks offer cashback through their current accounts, while others have personalised offers hiding inside their apps. Ms Springall said: “There are a few current accounts which provide a cashback scheme for different online or in-store spends, such as with Lloyds Bank and Monzo, but customers will need to keep on top of the offers in their banking app.” Chase currently offers eligible customers 2% cashback on qualifying spending, capped at £20 a month. That means someone maximising the offer could earn up to £240 over a year, although eligibility requirements apply. Santander Edge customers can earn 1% cashback on selected household bills, capped at £10 a month. That could be worth £120 a year, although the account charges a £3 monthly fee, bringing the maximum net gain from this cashback to £84. Nationwide FlexDirect currently pays 1% cashback on eligible debit-card spending, capped at £5 a month for 12 months. That’s potentially another £60, and the account does not charge a monthly fee. Don’t spend extra simply to earn cashback, though, as this could quickly wipe out any benefit. Make your savings work harder If you save on a regular basis, regular saver accounts can offer considerably higher rates Credit: SWNS Cashback and switching bonuses aren’t the only benefits worth considering when choosing a current account. Some pay interest on money sitting in the account. Nationwide’s FlexDirect, for example, currently pays 5% interest on balances of up to £1,500 for the first 12 months, subject to its terms. If you save on a regular basis, regular saver accounts can offer considerably higher rates than standard easy-access accounts in exchange for committing to certain conditions. Some currently pay as much as 8%. Santander, for example, offers a regular saver paying 8% AER for 12 months, after which the rate reverts to 3%. These accounts typically limit how much you can deposit each month and can have restrictions on withdrawals, so check the terms carefully. Ms Springall said: “Regular savings accounts can play an important role in developing positive savings habits, but consumers should always check the terms and conditions carefully to ensure the account matches their needs and circumstances.” Make the most of bank perks Some accounts offer free breakdown cover Credit: Alamy Packaged bank accounts can include free benefits such as travel insurance, mobile phone cover and breakdown assistance in exchange for a monthly or annual fee. Used regularly, the benefits can be worth considerably more than the account fee and could save you huge amounts of money compared with buying the same cover separately. For example, Lloyds claims the insurance included with its Platinum account is worth an average £682 a year, while the account itself costs £270 annually. But don’t assume a paid-for account will automatically save you money. Work out the annual fee and compare it with what you would otherwise pay for the benefits you will actually use so you don’t end up paying for unused perks. Put your savings on autopilot Automating your savings can quietly build up a rainy day fund Credit: Getty Images Automating your savings can help you quietly build a rainy-day fund without having to remember to transfer money manually each month. One option is to set up a standing order to move money into a savings account as soon as you are paid. Ms Springall said: “Saving little and often is the key to build up a nest egg, but it can be difficult for consumers to get into the right mindset. “If someone saved £3 a day, they could accumulate almost £100 in a typical month. “Apps and banking services can also help automate savings, making it easier to put money aside without having to think about it each time.” Some apps can go further by calculating how much they think you can afford to put aside. Plum, for example, can connect to a bank account through Open Banking and analyse income and spending before automatically setting money aside. Round up your spending to pain free savings Automating your savings could quietly build up a nest egg Credit: Alamy Another way of saving without having to think about it is to switch on a “round-up” feature, and it could quietly build up a nest egg. This rounds a purchase up to the nearest pound and puts the difference into savings – and the figures may be so small you won’t even notice. For example, if you spent £3.60 on a coffee, 40p could automatically be moved into your savings pot. It might not sound like much, but repeated across dozens of purchases each month, the spare change can add up. Mr Lakhani said: “When everything you buy is rounded up by the nearest pound, the pennies add up surprisingly quickly to boost your savings pot.” A number of banking and savings apps offer automatic round-ups, so it’s worth checking your app. Turbo boost with a savings challenge Challenges can be a fun way to set aside a bit of money Credit: Elena Medoks If you prefer to make saving into a game, you could try one of several popular challenges. These can be a fun way to set aside a bit of money. Under the 52-week challenge, you save £1 in the first week of the year, £2 in the second and continue increasing the amount by £1 each week until you put away £52 in the final week. Completing it would leave you with £1,378. Alternatively, under the 1p challenge you save 1p on day one, 2p on day two, 3p on day three and so on. By the final day you’ll be putting away £3.65, and you’ll have accumulated £667.95 in total. Someone completing both challenges would save a whopping £2,045.95 over a single year. However, remember that this isn’t “free money” – it’s your own cash being put aside. Make your savings work harder Savers should consider smaller banks rather than leaving their money with their main provider Credit: © Flavia Morlachetti Even if you already have a savings account, don’t assume you’re still getting a competitive deal. Rates can change and introductory bonuses can expire, leaving savers earning significantly less than they could elsewhere. Ms Springall said: “Apathy is dangerous when it comes to maximising interest returns, so savers need to feel inspired to shop around to take advantage of top rates. “The best deals are typically offered by challenger banks and mutuals, and they work incredibly hard to entice new business.” Mr Lakhani added that savers should consider smaller banks and fintech firms rather than automatically leaving their money with their current-account provider. “While your high street bank might be a convenient place for your savings, it may let you down when it comes to interest rates on your hard-earned cash. It’s worth shopping around for your savings.” If you have large amounts in savings, remember that interest can also become taxable once you exceed your Personal Savings Allowance. For basic rate taxpayers this is £1,000, falling to £500 for higher-rate taxpayers. Cash held in an ISA can earn interest free of income tax. Want help budgeting? There’s an app for that It’s worth using features in your banking app to check your regular spending Credit: Getty Your banking app can also help reveal where you’re spending more than you realise. Many now automatically categorise transactions, making it easier to see how much you’re spending on things like eating out, shopping and subscriptions. Dedicated budgeting apps such as Snoop and Emma can also bring accounts together to give you a wider view of your finances, so you can spot trends or patterns. Ms Springall said: “It might seem a hassle to budget, but it is worthwhile to put some time aside to get a clear picture of each financial commitment and become more conscious of behavioural spending. “Budgeting can be done on the go, and keeping sight of everyday spending can help someone be more mindful of their spending habits but could also reveal a necessity to make cuts.” Don’t miss out on loyalty points It’s a good idea to keep digital loyalty cards so you don’t miss out Credit: Getty Finally, make sure you’re not forgoing discounts and rewards simply because you’ve forgotten your physical loyalty card. Some apps allow you to store loyalty cards digitally so they’re always on your phone when you need them and you don’t miss out on discounts. The Klarna app, for example, allows users to add loyalty cards for scanning at the checkout for free. Ms Springall said: “Loyalty cards are great for frequent shoppers, but it can be easy to leave a physical card at home and miss out accumulating points. “A word of warning though – loyalty points can expire, and it will be up to consumers to keep track of these and exchange them for any rewards or vouchers.” It’s worth checking expiry dates on both points and vouchers, as converting points into a voucher does not necessarily mean you have unlimited time to spend it. Comment now