First Direct bumps up its 'golden hello' for new customers to £125 First Direct is offering a £125 cash incentive for those that sign up to its First Account - a clear indication that banks are gearing up to compete for customers as the deadline for new switching rules draws closer. The bank has added £25 to its usual £100 offer in a bid to entice new accountholders - but those wanting to take advantage will have to be quick off the mark as the offer is only on the table until October 30. First Direct sells itself on high service standards and it's UK-based, non-automated telephone banking has been a hit with customers. It also promises to pay unhappy customers £100 if they want to leave within the first year and have held the account for at least six months. Freebies: First Direct and Halifax currently both offer cash incentives for new customers From mid-September anyone will be able to switch their bank, transferring all direct debits and standing orders, in just a week, rather than the 30 days it currently takes. With the deadline drawing ever-closer banks are anticipating a rush of current-account switching. Could First Direct's deal be the start of a battle between the banks to win new customers using freebies and extra perks? Andrew Hagger, of MoneyComms, thinks so. He says: "I think we'll see more 'golden hello' type offers as well as short-term promotional deals on overdrafts and credit balances as banks look to gain new custom.' At present only First Direct and Halifax - which pays £100 - offer cash to new current accountholders. Halifax will also pay £5 a month if you hold its Reward Current Account (read more about this account here). Other appealing offers out there aimed at reeling in new customers include Santander's 123 Account, Lloyds TSB's Classic Account and Nationwide's FlexPlus Account, which all pay interest on in-credit balances. Read This is Money's guide for a full overview of these accounts. Although it is good news for consumers that banks are stepping up their game, Hagger warns that short-term or one-off incentives shouldn't be the basis for choosing a new account. So, is the First Direct First Account really worth switching for? Don't be put off by the perceived hassle of switching - it's simpler than you think. All you need to focus on are the following three steps: 1) Fill in application and transfer forms and provide proof of identity. 2) The new provider checks which payments you want moved across and sets them up, while getting your previous account provider to cancel the old ones. 3) Your account will be set up, and if you want your balance transferred and old account closed this will be done. For more on switching, check This is Money's guide here What does it offer? If you are looking for an account that won't heap you with charges if you stray into the red, the First Account is good option because of its interest-free £250 overdraft buffer. After that you will be charged 15.3 per cent interest up to the £500 arranged limit - still not a bad rate, comparatively. But don't get complacent. You will be charged a £25 arrangement fee for every day that you use an unauthorised overdraft above £500, although this is capped at £150 per month. If you are looking for more breathing space, Citibank's Plus Current Account offers a £500 interest and fee-free overdraft, but you have to be able to transfer £1,800 a month into the account. There are a number of conditions that you must fulfill in order to get your hands on the £125. For example, you must transfer at least two direct debits or standing orders to the account and commit to paying in at least £1,000 a month. If you don't you will have to pay a £10 monthly fee, which would quickly outweigh any of the sign-up benefits. It is also worth noting that to receive the £125 bonus, you will need to have transferred in £1,000 in your first month. Although the idea of £125 cash in hand is tempting, remember that it could take up to three months before it is paid into your account. This is Money's verdict An offer of free cash usually screams 'check the small print', but in the case of the First Account, although there are some things you will need to watch out for - namely straying beyond your agreed overdraft, and making sure you pay in the require amount each month, it is one of the most competitive deals out there. The bank has won awards for its customer service and boasts many satisfied customers. The fact there is no automated phone service and you always talk to a UK-based member of staff straightaway has been a huge hit with customers sick of waiting in call queues. Bear in mind that if you like to conduct your banking face-to-face it may not be the best option for you because First Direct has no branches. First Direct is owned by HSBC, so you can pay in cheques and cash via any of their High Street branches.