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A new offer of up to £150 to switch current account has been launched as competition between banks to tempt customers with cash incentives heats up.

The “switch and stay” offer will mean people receive £75 when they complete a switch to the Co-operative Bank and £25 per month for three months afterwards.

John Ward, director of products at the bank, said: “This offer allows eligible new and existing customers to benefit from up to £150 for switching and staying with the Co-operative Bank as their main current account provider.”

To qualify, people must apply for a Standard Current Account or an Everyday Extra account as well as meeting other criteria.

Smile Current Accounts, Student Accounts and Cashminder Accounts are not eligible.

Existing Standard Current Account, Everyday Extra, Current Account Plus, Privilege and Privilege Premier customers must request a full switch into their existing account to qualify.

In addition, to be eligible for the cash, they must not have benefitted from a switch incentive at the Co-operative Bank since November 1 2022.

To receive the switch payment of £75, in the 30 days following completion of a switch, customers must deposit a minimum of £1,000 into their new account and have two active direct debits.

They must also make a minimum of 10 debit card or digital wallet transactions, register for the Co-op’s online or mobile banking service, and set up the debit card in a digital wallet such as Apple Pay, Samsung Wallet or Google Pay.

To receive the “stay” payments of £25 in the first three months of their new account, each month customers must deposit a minimum of £1,000, have two active direct debits, and make a minimum of 10 debit card or digital wallet transactions.

If someone does not meet the criteria to qualify for the £25 stay payment in a particular month, they may still potentially be able to receive the other two months’ payments if they meet the criteria, but they will have only three chances to claim the £25 and the period will not be extended.

The offer will run until further notice, the bank said.

The Co-op’s announcement follows an offer launched on Wednesday by Nationwide Building Society of £175 to switch, subject to terms and conditions.

First Direct also offers a £175 switching incentive for those eligible.

Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “It’s encouraging to see some competition within the current account arena this week, and the Co-operative Bank’s new offer could be an enticing choice for consumers.

“Unlike traditional free cash payments that are paid fully upfront, the Co-operative Bank’s offer will be split between both an upfront payment, then a monthly cash reward.

“This loyalty cash payment is a nice way to boost someone’s balance each month, particularly as we edge closer to the festive season.”

But she cautioned that: “Anyone ready to ditch and switch would be wise to check the terms carefully.”

Ms Springall continued: “There could be more switcher offers launched in the weeks to come, but it entirely depends on whether they need to entice new business before the year ends.

“Indeed, a year ago, TSB was offering £150, and NatWest was offering £200.”

Ms Springall said that last year, some autumn perks were pulled in the run-up to Christmas.