New Year, new financial habits — right? But here's what most people get wrong about January: they focus on spending less when they should be focusing on earning more.
And January is absolutely the perfect month to do it. Banks are competing hard for new customers after the holiday rush, interest rates are finally starting to work in savers' favour, and you've got a fresh 12 months ahead to stack multiple income streams. Whether you've never switched a bank account before or you're a seasoned stoozer looking to optimise your returns, this guide will walk you through exactly what to do right now.
Why January is Your Banking Sweet Spot
Three things make January special for personal finance:
First, banks are desperate for deposits. After Christmas spending sprees, they need to rebuild their customer base and cash reserves. That means competitive switch bonuses and solid interest rates on savings accounts. You'll find offers that simply don't exist in March or June.
Second, cooling-off checker periods work in your favour. If you switch now, your 30-day cooling-off period runs through late February — and by then, you'll already have earned your bonus. You can then line up your next switch for March without any wasted time.
Third, regular savers reset. Most regular saver accounts run on calendar years, so January is when you can get the best rates and start building consistent monthly deposits from day one.
Let's break down your three-part strategy: switching, stoozing, and steady savings.
Part 1: Bank Switch Bonuses — Start With £175–£250
If you haven't switched banks in the past three years, you're potentially leaving hundreds of pounds on the table.
Right now, the market is strong. You've got genuine options:
- First Direct's 1st Account is offering £175 just for switching. You'll need to use their eligibility checker first, but if you qualify, this is one of the highest fixed bonuses available. They've also got a 7% regular saver attached (more on that later).
- Santander recently launched a £200 switch bonus, making them a strong contender if you want extra cash upfront.
- Other players like Nationwide and NatWest typically offer £200–£205 depending on which switching platform you use (uSwitch, Gocompare bank bonuses, or MSE all have different exclusive deals).
How switching works: You pick your new bank, they handle moving your direct debit guides and standing orders using the Current Account Switch Service (CASS), and seven working days later, your money and payments are settled. You then get your bonus — usually within 30 days of completing the switch. Check our switching guide for the full process.
The key insight: these bonuses are not "free money" — they're simply competitive offers. The bank earns money from your account through interest on their lending, and they're willing to share a slice of that with you to win your business.
One bonus is brilliant. Two bonuses in a year? Even better. Three? You're in serious stoozing territory now.
Part 2: The 0% Credit Card Stack — Compound Your Returns
Here's where most people miss out massively. Switch bonuses alone get you £150–£250. But if you combine them with a 0% purchase credit card, you can multiply that return.
Here's the strategy:
- Get your switch bonus (£175–£200) paid into your new bank account.
- Move money between your old and new accounts to understand both systems.
- Get a 0% credit card that gives you a long interest-free period (18–21 months if you can find them).
- Use that card for everyday spending, paying it off in full monthly from your switch bonus and salary.
- Deposit any remaining bonus into a high-interest savings account and watch the interest compound while your credit card balance sits at 0%.
This is stoozing in its simplest form. You're earning interest on your money while owing nothing to the credit card company. Learn how stoozing works for the full mechanics.
The risk? Miss a payment and that interest-free period evaporates. So this only works if you're disciplined enough to treat the card like a debit card — spend only what you'd normally spend, and pay it off immediately.
Part 3: Regular Savers — The Steady Earner
Regular savers are like the boring older sibling of bank accounts. They don't grab headlines, but they deliver seriously solid returns.
First Direct's regular saver is offering 7% right now, which is genuinely exceptional. To qualify, you need to open their 1st Account (£175 bonus) and set up a standing order from your account for £25–£300 per month.
Here's why this matters: if you save £100 per month with a 7% rate, you're earning roughly £42 interest in your first year. It's not a fortune, but it's tax-free (under your Personal Savings Allowance) and requires zero effort beyond setting up the standing order.
Other banks offering competitive rates:
- Nationwide's FlexDirect offers a promotional rate on top of base interest
- Santander's regular savers typically hit 5–6% depending on your account tier
- Check our live offers page for up-to-date rates, as these change weekly
The golden rule: pick a rate you can afford to save, even if it's just £25 per month. The compounding effect across a full year is surprisingly good, and you're building a savings habit that'll compound far more over decades.
How It All Works Together: Your January Action Plan
Here's what a realistic January reset looks like:
Week 1–2: Choose your first switch. Use your eligibility checker to see which banks will accept you. Go with either First Direct (best regular saver attached) or Santander (£200 bonus). You don't need to be strategic yet — just pick the one with the best offer you qualify for.
Week 3: Submit your switch application. They'll handle everything. In the meantime, set up a 0% credit card application with a separate provider (Barclaycard, Virgin Media Money, HSBC, etc.). You want a 20+ month interest-free period.
Week 4 onward: Once your switch bonus lands (usually within 30 days), do not spend it. Deposit it into your regular saver and set up that monthly standing order. This is now your "earn automatically" account.
Month 2: Plan your second switch. Use a different bank and a different switching platform to get a different exclusive offer. Your first cooling-off period will be ending, so you're free to switch again.
By March: You could have earned £350–£400 in bonuses, have a 0% card spending on your behalf, and have started a 7% regular saver that'll churn out roughly £42 per year.
Is this easy money? Not quite. You need to be organised, keep track of cooling-off periods (our cooling-off guide helps), and make sure you don't accidentally overspend on the credit card. But if you treat it as a system — spend time once, earn money all year — the return on that time is exceptional.
The Self-Assessment Tax Deadline (31 January)
Quick note: if you're self-employed or have untaxed income, your Self-Assessment tax return is due by 31 January 2023. Missing this deadline costs a £100 fine immediately, then £10 per day for late submissions.
This is not a banking tip, but it is essential financial admin. Get it done before the deadline, and you'll have peace of mind while you're setting up your new accounts.
Common Questions
Can I switch banks multiple times in one year? Technically yes, but there are limits. The CASS (Current Account Switch Service) rules say you can only switch once per payment account. However, you can have multiple accounts open at once, switch between them, and each one is a separate "event" with a separate cooling-off period. Most people do 2–4 switches per year comfortably. More than that starts to look odd to lenders and can impact your credit score slightly.
Do switch bonuses count as taxable income? No. Bank switch bonuses are considered "gifts" by HMRC, not income. You won't pay tax on them. Stoozing interest is taxable, but most people fall well under the Personal Savings Allowance threshold (£1000 for basic-rate taxpayers), so you still won't owe anything.
What if I can't afford to save £25+ per month? Then pick a regular saver that lets you save less, or skip it entirely. Some accounts let you save £10 per month. The point is to build the habit, not to hit a specific number. Even £10 per month at 7% is better than leaving money in a 0.01% account.
Do I need to use all three strategies (switching, stoozing, regular savers)? No. Pick the ones that suit you. If credit cards stress you out, skip stoozing and just do switching + regular savers. If you hate regular monthly deposits, focus on switching bonuses alone. The goal is to make more money without unnecessary risk or effort.
How much can I actually earn in 2023? If you do 3 switches (£175 + £200 + £205 = £580), earn 7% on a regular saver (roughly £42–£70), and stooze £500 on a 0% card for 12 months at 4% (roughly £20), you could realistically hit £650–£700 in additional income. That's not a salary replacement, but it's the equivalent of a week's groceries or a weekend away — with barely any real effort after the initial setup.
The new year is the best time to reset your banking, not because January 1 is magic, but because banks are competing hard for new customers and interest rates finally favour savers. Whether you switch once or stack multiple strategies, the point is simple: stop thinking of your current bank account as permanent, and start thinking of it as a tool to earn money.
Your future self (and your bank balance) will thank you.