You might have heard about the Business Banking Switch – where Royal Bank of Scotland (RBS) is incentivising selective business customers to switch their accounts to a different lender – and wondered if it was legitimate. Sounds crazy, right? But then again in these strange times, we shouldn’t be surprised by anything anymore!
But it’s true, RBS has dished out funding to the tune of £275million to 11 smaller banks so they can offer incentives to entice customers to switch.
And they’re not to be sniffed at because as well as including preferential interest rates and free banking for an initial set period, there are also cash lump sums being offered. While we’ve been aware of shops in our industry that have received upwards of £1,500, accountancy firm Smith Cooper believes some businesses could be getting up to £200,000.
That’s a sizeable chunk of money, especially when you add in what you’ll save in free banking charges for 18 months, which is what many banks are offering. Right now that might just tide you over during the current uncertainty but, equally, it might enable you to invest in new technology or take your business in a new direction. All for simply switching your business bank account to a rival provider.
Following the government’s £45 billion bailout of RBS during the 2008 financial crisis, RBS agreed to increase competition in the UK business banking sector by decreasing its market share. The answer was for RBS to create a standalone bank, Williams & Glyn. Unfortunately, this never came to fruition and with RBS now too big, incentives are being offered to switch to smaller banks in a bid to redistribute the share more evenly (according to Real Business Rescue, 70% of business banking accounts are held with either RBS, HSBC, Lloyds or Barclays).
The funds available for Business Banking Switch are limited; when they run out the offers will end. At the last count, 61% of the funding had been allocated, which means there’s just over a third still available.
To qualify for the RBS Business Banking Switch scheme, you must:
✅ Be a Royal Bank of Scotland or NatWest SME business customer
✅ Have a turnover of £25 million or less
✅ Have been due to move to Williams & Glyn
You will not qualify if:
✅ You joined RBS after 5th November 2018
✅ Your business is in financial difficulty or insolvent
➡️ Arbuthnot Latham & Co
➡️ Clydesdale Bank
➡️ Co-operative Bank
➡️ Hampden & Co.
➡️ Metro Bank
➡️ Santander UK
➡️ Starling Bank
➡️ TSB Bank
➡️ Monzo Bank
➡️ Nationwide Building Society
The process is said to be quite quick, from what we’ve learnt it takes roughly 20 minutes, and you’ll need your account number and sort code for your main business account as well as your business contact information. After that, your new bank will take care of closing your old account, moving your balance and switching your payments.
With money tighter than ever and a lot of uncertainty ahead, it’s got to be worth taking a look to see if you qualify. For more information visit www.businessbankingswitch.rbs.co.uk