Switching bank accounts while I have a loan

MynameisMichaelCane

Several years ago I switched to First Direct to benefit from the incentive. I have been very happy with them and now have a personal loan with them, as well as the current account. I would like to switch again to take advantage of the one of the good switching offers available now. Would the fact that I have a personal loan with First Direct be a problem?

friolento

This depends on the T&Cs of your loan agreement.

PRAISETHESUN

Typically no, unless the conditions your your loan require you to maintain a FD current account.

CASS only switches current accounts, meaning anything that is not the specific current account you select to switch remains unaffected

MynameisMichaelCane

Many thanks. I can't see anything in the T&Cs about maintaining a First Direct current account or that the repayment must come from my current account.

Now to decide which switching bribe to go for and the best time to apply for the switch.

Rob5342

If you are happy with them why not keep the account for your main banking, open another account with another bank and switch that around all the banks to get all the switching bonuses. That's what I and other people here have done.

The_Groat_Counter

https://forums.moneysavingexpert.com/discussion/comment/82164232#Comment_82164232

Agreed, given the OP says they "have been very happy with them" (i.e. First Direct). They aren't quite the most cutting edge bank these days, but customer service wise they have a good reputation.

tom192

Also worth having a long term account if you are looking at anything to do with mortgages on the horizon, lenders like stability. As others have said keep the FD and go down the mule account route.

friolento

https://forums.moneysavingexpert.com/discussion/comment/82164674#Comment_82164674

Definitely never ever go anywhere near a mule account as these are personal or business bank accounts used by criminals to receive, hide, and transfer stolen or illegal funds.

What you mean is known as a dummy or a donor account - a spare current account you only use for the purposes of getting a switch bonus. Never call it a mule account.

MynameisMichaelCane

Many thanks for the advice. I can see the appeal of having a second account for switching purposes but perhaps that works best for people on a high income? For example, to get some of the incentives you need to pay in a minimum amount and have some direct debits going out of the account.

I do actually have a second account with Chase which I self fund for day to day spending (I opened it when they gave cash back on groceries and petrol purchases). I don't have my income paid directly into it and don't have any direct debits from it but perhaps it could be used. Any thoughts?

friolento

Income doesn’t matter for standard current accounts, of which there are plenty. Setting up any DDs required on the donor account for the switch bonus might be a bit more challenging - but there is a thread on here with suggestions for ‘easy’ DDs.

You could switch your Chase account but they won’t let you back if your only Chase current account gets closed (which happens as part of the switch). Some people have set up second / third etc Chase current accounts and switched these but there are now reports of Chase taking a very dim view of such practices so I would not recommend doing this.

friolento

🧵 with DD suggestions

https://forums.moneysavingexpert.com/discussion/6656547/a-regularly-updated-list-of-accounts-that-allow-direct-debit-and-or-debit-card-deposits