£150 Halifax Switch Offer + 0% Overdraft for 6 months! (12th July 2022 - 5th September 2022)

kaMelo

There's nothing stopping you doing that but you could also downgrade it to a normal fee free account after you have received the switching bonus, leaving yourself a donor account for any future switch offers.
But if you can cycle £1500 p/m then this account gives you a very easy £5 a month for doing so.

homemover2020

kaMelo said:

There's nothing stopping you doing that but you could also downgrade it to a normal fee free account after you have received the switching bonus, leaving yourself a donor account for any future switch offers.
But if you can cycle £1500 p/m then this account gives you a very easy £5 a month for doing so.

Thanks for confirming about closure / downgrade.

Don't think the £5 a month would work though as I would also need to spend £500 on debit card or leave £5000 in the account, neither of which I would do.

rallycurve

Leaving £5000 in the account works out at 1.2% AER which is no longer competitive when there are loads of easy access accounts paying 1.4%-1.6%. That is £5.8-£6.66 a month instead of £5 that Halifax pays

The £5 reward does not count towards your savings allowance as it is considered income and you actually receive £6.25 gross. If you’re a higher rate tax payer, you will have to pay extra tax so it is actually £3.75.

Being considered income, it could make a difference if you received interest over £1000 but it is still not worth it when there are easy access cash ISAs paying better than that 1.2% AER.

So I think it now makes sense ditching the Halifax Reward current account if you selected the £5 reward by keeping £5000 in the account.

EarthBoy

There's nothing to stop you closing the account, or switching it away.

Alternatively, if you want to keep a Halifax account, simply downgrade it to the ordinary current account, which has no monthly fee.

PRAISETHESUN

rallycurve said:

Leaving £5000 in the account works out at 1.2% AER which is no longer competitive when there are loads of easy access accounts paying 1.4%-1.6%. That is £5.8-£6.66 a month instead of £5 that Halifax pays

The £5 reward does not count towards your savings allowance as it is considered income and you actually receive £6.25 gross. If you’re a higher rate tax payer, you will have to pay extra tax so it is actually £3.75.

Being considered income, it could make a difference if you received interest over £1000 but it is still not worth it when there are easy access cash ISAs paying better than that 1.2% AER.

So I think it now makes sense ditching the Halifax Reward current account if you selected the £5 reward by keeping £5000 in the account.

This discussion comes up every time there's a Halifax offer but keeping £5k in the account is actually worse then that, because you can get the £5 reward by opting for the debit card option in addition to savings interest by keeping the money in an interest bearing account with another bank - you can have your cake and eat it too in this situation. Additionally, my understanding of the tax implications is that the debit card option is classed as "cashback" which does not need to be declared to HMRC, whilst the savings option is considered some sort of interest which would need to be declared if you are a higher rate payer.

There's a few options to artificially generate the debt card spend if you wouldn't normally spend £500 each month. The easiest option is to pay existing bills with your card (assuming this doesn't cost you extra, like it does for some energy bills), paying off regular CC spending with your debit card, or by making payments to "yourself" by using your debit card to top up savings accounts held in your name (where the account allows it, like you can for NS&I or some building societies).

rallycurve

PRAISETHESUN said:

rallycurve said:

Leaving £5000 in the account works out at 1.2% AER which is no longer competitive when there are loads of easy access accounts paying 1.4%-1.6%. That is £5.8-£6.66 a month instead of £5 that Halifax pays

The £5 reward does not count towards your savings allowance as it is considered income and you actually receive £6.25 gross. If you’re a higher rate tax payer, you will have to pay extra tax so it is actually £3.75.

Being considered income, it could make a difference if you received interest over £1000 but it is still not worth it when there are easy access cash ISAs paying better than that 1.2% AER.

So I think it now makes sense ditching the Halifax Reward current account if you selected the £5 reward by keeping £5000 in the account.

This discussion comes up every time there's a Halifax offer but keeping £5k in the account is actually worse then that, because you can get the £5 reward by opting for the debit card option in addition to savings interest by keeping the money in an interest bearing account with another bank - you can have your cake and eat it too in this situation. Additionally, my understanding of the tax implications is that the debit card option is classed as "cashback" which does not need to be declared to HMRC, whilst the savings option is considered some sort of interest which would need to be declared if you are a higher rate payer.

There's a few options to artificially generate the debt card spend if you wouldn't normally spend £500 each month. The easiest option is to pay existing bills with your card (assuming this doesn't cost you extra, like it does for some energy bills), paying off regular CC spending with your debit card, or by making payments to "yourself" by using your debit card to top up savings accounts held in your name (where the account allows it, like you can for NS&I or some building societies).

Yes, you are right, if you chose to spend £500 on the debit card, it is still a decent offer. But I was talking about keeping £5000 in the account to get the reward and I don't think that makes sense any more with the current interest rates.
I know the debit card option is not for everyone and I don't think you can switch to that once you have selected the £5000 so I am sure many will be closing or downgrading the account now.

thriftytracey

I am considering switching from HSBC to the Halifax Rewards account.  However, I don't want the app on my phone.  I prefer to do my online banking on my PC at home.  HSBC were able to send me a gadget to authorise logins.  Does anyone know if Halifax will do the same?

rallycurve

thriftytracey said:

I am considering switching from HSBC to the Halifax Rewards account.  However, I don't want the app on my phone.  I prefer to do my online banking on my PC at home.  HSBC were able to send me a gadget to authorise logins.  Does anyone know if Halifax will do the same?

You don't need the app nor a physical device to log into online banking for Halifax.

PRAISETHESUN

thriftytracey said:

I am considering switching from HSBC to the Halifax Rewards account.  However, I don't want the app on my phone.  I prefer to do my online banking on my PC at home.  HSBC were able to send me a gadget to authorise logins.  Does anyone know if Halifax will do the same?

Halifax uses SMS for their 2FA - no need for any dongles, keypads, or in-app verification.

thriftytracey

Thanks for responses.  That's good news.  I do have another question!  The £1500 requirement - is it OK if it is 3 separate payments that total £1500?  I have two amounts that go into the existing HSBC account automatically at different times of the month which total approximately £1100 so I need to make it up with £400 (which I will then return to the other account).