Santander, Lloyds, NatWest, Nationwide customers warned over free £705 payments in bank account

Lloyds Bank, NatWest, Nationwide customers have been warned over free payments landing in bank accounts. NatWest is offering free £180, while Nationwide is paying out £175, and Santander is offering £150 free for those who switch.

Lloyds has a free £200 offer for those who switch, too. But account holders and customers are being warned the move could actually backfire - because switching may not be so compelling if you end up stuck on a falling interest rate.

Ian Pagdin, senior lecturer in Banking, Risk Management, Investment and Wealth Management at Sheffield Business School, said: "It is possible that there may be more attractive offers than this although with the current falling trend of interest rates, this may limit the 'generosity' of the offers going forward into 2025."

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He said: "Other perks to entice could include reduced or zero monthly fees and even cashback offers, and maybe retail vouchers." He warned: "Cashback offers are often linked to overall spending and therefore might not be quite as attractive as you may think.

"Other potential possibilities are perks such as travel insurance, but if you don't travel abroad then this may not be attractive to the individual." Rachel Springall, Finance Expert at Moneyfactscompare.co.uk said: “There is some good and bad news for savers looking for a guaranteed return on their investment, as the fixed bond market felt a mix of cuts and rises to market-leading rates week-on-week.

"Savers waved goodbye to the only one-year fixed bond that paid five per cent, but the good news is those looking to save for two years will find better returns are available. There has been little change to variable rates, but there were a couple of easy-access cash Isas improving their offers in the top rate tables.

“It remains that many of the top rate positions in the market are held by challenger banks, who should not be overlooked in favour of the more familiar household brands. Savers will no doubt be concerned of another base rate cut this week, and should this occur, it could have devastating repercussions on savings rates. Consumers would be wise to keep a close eye on their pots and switch if they are not being rewarded for their loyalty.

"Outside of the Bank of England base rate, there appears to be some swap rate activity over recent days, so providers will no doubt be monitoring this closely to see how this might impact their pricing on interest rates over the next couple of weeks.”