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News : Banks to offer attractive new account bribes

It has been revealed that many banks are to begin offering attractive bribes to get people to sign up for new current accounts. Many limited company contractors might be lured in by the chance to get money for free, but there can be a sting in the tail so consumers are being advised to look at account fees.

The banking industry is looking to open thousands of new current accounts over the coming months, and some of the biggest names on the High Street are set to start advertising campaigns to highlight their newest deals. Many are offering over £100 in cash and free overdrafts for the first year, enticing limited company contractors to take advantage of schemes. However, people have been advised to look closely at account fees, as consumers could find that there are some less attractive features, such as overdrawn penalties, written into contracts.

The surge comes as new rules prepare to make changing banks easier. Due to come into effect in September, these new rules will allow customers to easily swap between current accounts and will make it harder for financial institutions to sell expensive packaged accounts. Therefore, banks are trying to get around the issue by attracting a lot of new customers before the regulations come into effect.

Financial expert Justin Modray said: “Don’t be seduced by cash incentives without first checking potential account charges, especially if you’re likely to go overdrawn. Take your eye off the ball and a bank could soon claw back this money and more. Banks are too ruthless to give money away if they didn’t think they could pocket a fat profit out of you, otherwise they wouldn’t bother offering such incentives.”