You've completed your first bank switch. The bonus has landed — maybe £100, maybe £175. You feel that dopamine hit of free money and immediately think: "Right, when can I do this again?"
Then you discover cooling-off periods. Most banks won't let you claim a switching bonus if you've held an account with them in the last 12 to 24 months. Suddenly that exciting strategy of switching banks every few weeks hits a wall.
But here's what most people get wrong about cooling-off periods: they treat them as dead time. Months where nothing happens. Where your money just sits there, earning a pittance in a current account while you wait for your next switch to become available.
That's a mistake. A costly one. Because every month you're not optimising your money during a cooling-off period, you're leaving real earnings on the table. Let me show you exactly how much — and what to do about it.
The Real Cost of "Just Waiting"
Let's run the numbers. Say you've just switched to First Direct and claimed their £250 bonus (which is currently available as one of the strongest deals on the market right now). You plan to switch away in a few months to collect another bonus elsewhere. But after that second switch, you'll need to wait at least 12 months before First Direct will consider you a new customer again.
During those 12 months of cooling-off, what happens to the money sitting in your current account?
Most standard current accounts pay somewhere between 0% and 0.10% interest. If you've got £3,000 sitting in a current account earning 0.05%, that's £1.50 for the entire year. Not exactly thrilling.
Now compare bank bonuses that to what you could be earning:
- regular savers accounts are currently paying up to 5% on monthly deposits (though the headline rate is misleading — more on that in a moment)
- Stoozing with a 0% credit card can earn you interest on money you'd be spending anyway
- High-interest current accounts like TSB's Classic Plus pay 3% on balances up to £1,500
The difference between doing nothing and doing something during a 12-month cooling-off period can easily be £100 to £200. That's essentially another bank switch bonus — just for being a bit more organised with your money.
What Actually Happens During a Cooling-Off Period
Before we get into strategies, let's make sure we're clear on the mechanics.
When you switch away from a bank using the Current Account Switch Service (CASS), your old account is closed automatically. The cooling-off clock typically starts ticking from that closure date. So if you switch away from HSBC on 20 January 2020, most offers requiring a 12-month cooling-off period would make you eligible again from around 20 January 2021.
A few important wrinkles:
Banking groups share cooling-off periods. This is the one that catches people out. Lloyds, Halifax, and Bank of Scotland are all part of Lloyds Banking Group. If you switch away from Halifax, you typically can't claim a Lloyds switching bonus either — the group treats you as a recent customer across all their brands. The same applies to NatWest/RBS and to HSBC/First Direct (though First Direct sometimes tracks eligibility separately — always check the specific offer terms).
The clock starts from closure, not from switching. Under CASS, your old account closes approximately seven working days after you initiate the switch. If you're cutting it fine on a cooling-off deadline, those extra days matter.
Some banks measure from when they last paid you a bonus, not from when you closed the account. If a bank was slow to pay your last switching bonus, your cooling-off period might end later than you expect.
Read the terms every time. Banks change their eligibility criteria regularly. A bank that required 12 months last year might require 24 months this year. Never assume — always check. Our eligibility checker can help with this.
Strategy 1: Fill the Gap With Regular Savers
Regular saver accounts are the single best thing you can do during cooling-off periods. They're designed for exactly this situation — you put away a fixed amount each month and earn a guaranteed interest rate that's significantly higher than anything you'd get from a normal savings account.
Right now in January 2020, several banks offer regular savers paying between 2.75% and 5% — and a few require you to hold a current account with them, which is perfect if you've just switched in and are now sitting in a cooling-off period with your previous bank.
Here's how to maximise them:
Open the regular saver as soon as you switch. Most regular saver accounts are only available to current account holders at the same bank. When you switch to a new bank for a bonus, immediately check whether they offer a regular saver. If they do, open it on day one and start your monthly deposits. You've got 12 months of cooling-off time to fill — might as well earn decent interest while you wait.
Understand the real returns. A "5% regular saver" doesn't mean you earn 5% on your money. Because you're depositing monthly (say £250 a month), your average balance over 12 months is only half the maximum. On a £250/month regular saver at 5%, you'd earn roughly £81 in interest over the year — not the £150 you might naively expect. Still excellent for zero-risk savings, but worth understanding so you can plan accurately.
Stack multiple regular savers. Some banks let you hold more than one regular saver, and you might be able to open them at different banks. If your partner is also switching, they'll have their own set of regular savers available too. A couple could realistically have three or four regular savers running simultaneously.
For a full breakdown, see our guide to how regular savers actually work.
Strategy 2: Stooze During the Wait
Stoozing is the art of borrowing money at 0% interest (via a 0% purchase or balance transfer credit card) and putting it into a savings account to earn interest. The interest is yours to keep. It's perfectly legal, costs nothing if managed correctly, and pairs beautifully with cooling-off periods.
Here's a simple example:
- You get a 0% purchase credit card with a 12-month interest-free period
- You put all your normal spending (groceries, fuel, bills you can pay by card) on the credit card
- The money you would have spent stays in your bank account, earning interest
- Just before the 0% period ends, you pay off the card in full
If your monthly spending is £1,000 and you keep that money in an account paying 1.5% for 12 months, you'd earn roughly £90 to £100 in interest — on money you were going to spend anyway.
The beauty of stoozing during a cooling-off period is that it works regardless of which bank you're with. You don't need to switch accounts to do it. You just need a 0% credit card and a savings account. It's the perfect activity for that "dead" waiting time between switches.
Check out our full stoozing guide for step-by-step instructions and the maths behind it.
A word of caution: stoozing only works if you're disciplined. You must pay off the card before the 0% period ends, or the interest charges will wipe out your gains (and then some). Set a calendar reminder. Put the repayment money somewhere you won't touch it. If you're not confident you can manage this, stick with regular savers — they're risk-free.
Strategy 3: Use High-Interest Current Accounts as Holding Bays
Some current accounts pay decent interest on your balance, which makes them useful as holding accounts during cooling-off periods. Right now, a few options stand out:
TSB's Classic Plus account currently pays 3% interest on balances up to £1,500. That's £45 a year for doing absolutely nothing beyond keeping the money in the account. You do need to deposit at least £500 a month and register for online banking, but those are easy requirements to meet.
This is also a strategic play for serial switchers. If you can use a high-interest current account as your "home base" — the account you switch from and return to between bonuses — you're earning interest even during your downtime. Some banks don't require you to use CASS to open a current account with them, meaning you can hold one alongside your main account without burning a switch.
Head to our live offers page to see which high-interest current accounts are available right now.
Putting It All Together: A Cooling-Off Period Action Plan
Here's what a well-optimised 12-month cooling-off period looks like in practice. Let's say you've just switched to a bank and collected a £175 bonus. Now you're waiting 12 months before you can switch back to a previous bank.
Month 1: Open the bank's regular saver (if available). Start monthly deposits. Apply for a 0% purchase credit card if you don't already have one. Start putting everyday spending on it.
Months 2-6: Continue regular saver deposits. Continue stoozing. Keep an eye on the live offers page for new switching deals at banks you haven't been with recently — you might be able to fit in another switch to a completely different bank during this time.
Months 7-11: Your regular saver approaches maturity. Start planning your next switch. Check which banks you're now eligible for. The money from stoozing should be accumulating nicely in your savings account.
Month 12: Regular saver matures — collect your interest. Pay off any 0% credit card balance. Execute your next bank switch.
Running this playbook, your 12-month "cooling-off period" could look something like this:
- Bank switch bonus: £175
- Regular saver interest (£250/month at 5%): ~£81
- Stoozing earnings (£1,000/month spending, 1.5% savings rate): ~£95
- High-interest current account (£1,500 at 3%): ~£45
Total: roughly £396 from a single 12-month period. Compare that to the £175 you'd have earned by just collecting the switching bonus and letting everything else sit idle. The cooling-off period didn't cost you money — it made you an extra £221.
The Bigger Picture: Why January 2020 Is a Great Time to Start
We're at the beginning of a new year, and right now the switching market is fairly active. First Direct is offering £250 to switch. There are deals worth £100 and £175 from several other banks. Regular saver rates are still reasonable, and 0% credit card deals are widely available.
If you start today, you can set up the entire system — your first switch, a regular saver, a stoozing arrangement — and have everything running by February. By this time next year, you'll have cycled through at least two or three switches and earned several hundred pounds from the strategies in between.
The key insight is this: cooling-off periods aren't a problem to be solved. They're simply the rhythm of bank switching. Once you accept that rhythm and fill the gaps with complementary strategies, you'll earn significantly more than someone who just switches and waits.
Check the live offers page for today's best deals, and use our switching guide to get started.
Common Questions
Do all banks have cooling-off periods? Most do, but they vary. The most common is 12 months, meaning you can't have held a current account with the bank (or its banking group) in the last 12 months. Some banks require 24 months, and a few occasionally run offers with no cooling-off restriction at all. Always check the specific terms of the offer you're applying for.
Can I switch to a different bank in the same group during a cooling-off period? Usually not. If you're cooling-off checker from Halifax, you typically can't claim a bonus from Lloyds or Bank of Scotland either, since they're all part of Lloyds Banking Group. The same grouping applies to NatWest/RBS and HSBC/First Direct (though First Direct sometimes operates independently — check the terms).
Does the cooling-off period start from when I switch away, or from when I opened the account? It typically starts from when your old account was closed, which under CASS is about seven working days after you initiate the switch. Some banks measure from when they last paid you a bonus instead. Note both dates when you complete a switch so you know exactly when you'll become eligible again.
Can I hold a savings account or credit card with a bank while I'm in a cooling-off period for their current account bonus? This depends on the specific offer terms. Some banks only require that you haven't held a current account with them recently. Others exclude you if you hold any product. Read the small print carefully, or use our eligibility checker to check.
Is it worth switching banks if I can only do it once or twice a year because of cooling-off periods? Absolutely. Even two switches a year could bring in £250 to £500 in bonuses alone. Add regular savers and stoozing during the gaps, and you're looking at £500 to £1,000 a year — for perhaps a few hours of total effort. That's an exceptional hourly rate for what amounts to filling in some forms and moving money around.