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Cashback from a current account

A few current accounts give you back some of the cash you spend, we take a closer look at what’s on offer

Cashback accounts typically return a percentage of your spending as cash, for example if you have a current account offering 1% cashback, for every £100 you spend you’ll earn £1.

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But the amount you can earn depends on how and where you spend. Often you will only be paid cashback on certain purchases, bills, or spending with specific companies.

Also it’s worth noting that many current accounts offering cashback have a maximum amount they will pay-out. So before you do any big spending make sure you find out this limit, as you may not get as much cashback as you’d expect from the headline figure.

NatWest – 3% rewards on household bills

NatWest don’t offer cashback, they offer reward points which can be exchanged for their equivalent in cash (5 rewards=£5).

NatWest’s reward current accounts offer 3% reward points on selected household bills for:

  • Council tax
  • Mobile and landline
  • TV packages
  • Water
  • Gas
  • Electricity
  • Broadband

But this is limited to no more than £1008 cashback in total per year – though you would have to have monthly outgoings of around £2800 to earn this figure.

In addition you can earn 1% cashback for making purchases on contactless until 31 December 2015 and on qualifying purchases at NatWest’s 28 partner retailers.

The account fees

The standard NatWest reward account comes with a £3 monthly account fee and will pay you no interest for your deposits.

The more expensive Silver Account (monthly fee £12) offers the same cashback offer, but you get European travel insurance and mobile phone insurance included.

Similarly, the Platinum Account costs £18 per month but includes UK breakdown cover, mobile and worldwide travel insurance, as well as the cashback.

Santander – cashback available up to 3%

The Santander 123 Current Account has a combination of competitive interest rates and cashback for your spending on household bills and Santander mortgage payments. You can earn:

  • 1% cashback on water, council tax and Santander mortgage payments (up to maximum monthly mortgage payments of £1,000)
  • 2% cashback on gas and electricity bills
  • 3% cashback on mobile, home phone, broadband and paid for TV packages

The annual cashback you can earn is capped at £530 – but to earn this much you would have to have monthly outgoings from the account of £3000.

In addition to the cashback, Santander also offer one of the highest interest rates for deposits. You can earn:

  • 1% AER (variable) interest on your balance once you have £1,000
  • 2% AER (variable) interest on your balance once you have £2,000
  • 3% AER (variable) interest on your balance once you have £3,000 up to a maximum of £20,000

The account fees

To get this account you will need to pay a monthly fee of £2 for the account, but note that from 11 January 2016 this will change to £5 per month.

You also need to have at least 2 active Direct Debits and deposit at least £500 a month.

Santander 123 Credit Card

The Santander 123 Credit Card is one of the more versatile cards available. It offers 23 months 0% interest on purchases and balance transfers as well as cashback up to 3%.

Usually the card charges a monthly fee of £2 (rising to £3 in January 2016), but if you are a 123 Current Account holder, these fees are waived.

What’s the best cashback account?

There is no definitive ‘best’ current account for cashback. You should carefully consider your financial situation and think about how much you spend and where your money goes.

You could use the cashback calculators banks often provide for their cashback products to see if it’s worthwhile for you, especially bearing in mind the account fees.

Whatever you decide, the Switch Guarantee makes it simple to switch banks, by ensuring your Direct Debits and in-going payments are automatically moved over in a seven day time period.

Read more…

Switch to a cashback account

Compare current accounts that offer cashback.

Cashback current accounts