We’re big fans of bank account switching. Taking advantage of switching incentives takes just a few minutes, and with bonuses of up to £200 up for grabs, it can provide a great little income boost.
Switching itself is easy, but meeting the critera to recieve the switching incentive, can be a little more tricky. Most offers require you to have at least two ‘active direct debits’. And while you’re likely to already have mutiple direct debits coming from your main account, it can be a real hassle to move these around.
In this article we’re going to look at ways around that, with our top picks of the best cheap direct debits for bank switching.
At the time of writing there are 5 major bank switching incentives with a total of £825 up for grabs. These offers can and do change regularly to be sure to see our guide to the best bank switching offers and incentives.
N.B We always suggest you use a throwaway bank account to take advantage of switching incentives, rather than move your main account. Monzo is great for this as a free account that can be opened quickly, and is a member of Current Account Switching Service. Use our link to join you’ll also get a free £5 bonus.
In this guide show contentsEven though the money you spend via a direct debit is likely going to be much less than the bank switching incentive, don’t spend extra money for the sake of it. That’s where these top free direct debits come in.
If you’ve read our Plum app review, you’ll know that Plum is an AI powered budgeting, savings, and investment app that uses Open Banking to connect to your bank accounts and automate your savings.
Crucially for bank switching, it uses a direct debit to move money from your bank account to your Plum saving account. The direct debit is fast, and is setup automatically, so there’s nothing you need to do.
Since no money is actually spent (rather just moved to your Plum account), it doesn’t cost you anything. Get a free plum account here.
It’s worth pointing out that Plum doesn’t work with Co-op bank, so if you’ve switched to Co-op in the past to take advantage of the previous £125 refer a friend offer, you won’t be able to use Plum as a direct debit for switching away.
Like Plum, Moneybox is a saving and investments app that takes payments via direct debit. It has a 4% Simple Saver account with a low minimum deposit of £1. You can make one withdrawal a month from the account, and the money will be deposited in your bank account the next day.
The direct debit itself is taken on a Wednesday, but takes a day or two to set up, so bear that in mind.
Make sure you choose the Simple Saver account when you sign up as Moneybox’s non-cash saving and investment option carry a small fee, where as the Simple Saver is free.
When you add or link a bank account to Paypal it will create a direct debit to that account for the purposes of moving money back and forth between your Paypal account and your banka ccount. The direct debit takes around 2 days to show up, and you’ll need to confirm your bank account within the paypal app.
Once set up you’ll have the option of moving money to your PayPal account from your bank account, or paying for items via PayPal from your bank account rather than via your PayPal balance or debit/credit card.
There’s a little confusion here though, as in some cases Paypal has taken or returned money via a direct transfer rather than via direct debit. Nethertheless, a direct debit instruction does stand on the account and for some banks such as Nationwide, that is enough.
Tip: Check out our free money offers article as Paypal regularly runs offers only available via referral.
These direct debits will cost you money, but they are likely things you already subscribe to or pay anyway.
Currensea is a specialist travel card that acts as a layer over your existing bank account. It offers better rates than you’d otherwise get via a regular high street bank, but crucially for this article, it charges your main account via direct debit.
We have full Currensea review detailing our experiences with the app, and if you sign up to Currensea, using our link, you’ll get £10 cashback on your holiday spend.
We’re not advocating that you play the Lottery, but if it’s something you already do once a month or more, then consider doing it online and using a direct debit to top up your account.
Do bear in mind though that the National Lottery states it takes up to 4 weeks to set up the direct debit, so this is one you’d want to do well in advance.
If you’re considering donating to charity, or there’s a cause dear to your heart, you’ll be pleased know that many of UK’s leading charities are also happy to take donations via direct debit. Direct debits can often be set up from as little as £2 depending on the charity in question. What’s more, you can also apply for Gift Aid tax relief on the donations.
Popular charities that accept direct debits include:
This is far from an exhaustive list, and there are many other well deserving charities that also accept direct debit donations. Check with your favourite charity for more information.
If you’re a member of a Gym, Tennis club, sports club or other society, check to see if they offer payment by direct debit. Since these are all usually paid in advance, there’s no credit involved, which means they don’t report to credit referencing agencies.
As such if should be safe to move these to your ‘throw away switching’ account.
There are number of website offering cheap direct debits for bank account switching, but our favourite is Tiny Direct Debit. Created by fellow money saver Jack Lewin, Tiny Direct Debit, offers direct debits from as little as £1 a month, and equally importantly from our point of view, offers fast and easy cancellation and monthly direct debit reminders.
Here’s what Jack has to say:
I wanted to take advantage of bank switch offers without switching my main current account. Instead of dealing with the hassle of moving my bills, I set up Tiny Direct Debit. It’s the easiest way to set up a cheap direct debit – quick to set up & easy to cancel. Thanks to Tiny Direct Debit, I maximise the bank switch bonuses. Hopefully others can benefit too!
Most people will have a number of common direct debits, these include things like Council Tax, TV licensing, credit cards, store cards, mobile phone, water/electricity/gas etc.. We would suggest that you don’t move these just to meet incentive requirements.
If you truly want to switch your main account, then sure, go for it, but if you’re a serial switcher, or just switching to gain incentives, we’d suggest using a secondary or ‘throw away’ account and switching that instead.
Our preferred account for switching is Monzo as it’s fast open (usually same day), is a member of the Current Account Switching Service, and if you open a Monzo account via our link, you’ll also get £5 cashback when you make a debit card purchase.
Moving these common debit debits and then forgetting to top up your account to pay them could lead to missed payments harm you ability to gain credit in the future.
The vast majority of poeple still only have one main bank acconut that they use for everything. Requiring two direct debits on the account that’s being switched, is the bank’s way of trying to enusre you are switching an account that you actually use and use regularly. As they can’t make money on an account you never use.
They want you to switch your main account to them, so they can earn interest from your deposits, loans, overdrafts, or potentially even a mortgage. If you’re only switching the incetive though, we’d always recommend you use a ‘throw away’ account instead, and setup some of these cheap direct debits instead.
Bank switching bonuses are an excellent way to make your banking work for you, and the direct debit requirement shouldn’t stand in your way. By choosing smart, low-commitment direct debits, you can easily meet the criteria and enjoy your bonus without undue hassle or expense.
Remember to cancel any temporary direct debits once you’ve secured your bonus, and enjoy your financial boost with minimal effort.
Simpley put, a direct debit is an instruction from you to your bank authorising an organisation, such as a utility company or a subscription service, to withdraw funds from a your bank account on an ad hoc or regular basis.
You authorise this by completing a direct debit mandate form.
All direct debits are backed by the direct debit guarentee protecting you from incorrect or fraudulant payments.
An active direct debit, is one that has been setup and a payment taken within the last 12-13 months, or recently setup with a payment pending. Some banks will want to see at least payment having been taken via the active direct debits in last month, whereas others are consider the ‘2 or active direct debit’ criteria met even if no money has been taken yet.
As such it’s important to double check the terms and condition of any switching you are considering, and making sure everything is in order before you initiate the switch.
It is possible to have old direct debits still set up and visible on your account that haven’t been used for years. Although a direct debit mandate might still exist for these, they are unlikely to be considered ‘active.’
