With the rise of challenger banks and a shift away from ‘traditional’ ways of banking, high-street institutions have to entice customers to join and stay with them.
In other articles, we’ve looked at the best online-only bank accounts and how to switch bank accounts.
High-street banks can often provide better sign-up bonuses to new and switching customers. In this article, we look at the best rewards and cashback accounts.
If you’re savvy about choosing a bank account, you can get one that fits your needs and rewards you for the effort. Cashback, free money, preferential savings rates, and other incentives can make a big difference to your financial goals.
We look at what rewards accounts are, what incentives are on offer, and what you should look for. We also suggest some of the best reward bank accounts out there for you.
| Provider | Score | Details |
|---|---|---|
| 1. NatWest | ★★★★★ | Learn more |
| 2. Barclays | ★★★★★ | Learn more |
| 3. HSBC | ★★★★★ | Learn more |
| 4. First Direct | ★★★★★ | Learn more |
| 5. RBS | ★★★★★ | Learn more |
What is a Reward Account?
A reward account is a banking product, usually a current account, which rewards the holder for using it. Often, these types of products have an initial incentive to draw in new customers but also have ongoing benefits.
There’s a wide variety of these accounts available, and the terms and conditions vary for each. Some will charge a monthly fee for using them, which again can vary between banks.
There are often terms and conditions that the account holder needs to meet to qualify for the rewards. For example, in some instances, you will need to pay a certain amount, initially or monthly, to be eligible. Additionally, you may have to use other banking products such as online banking or set up a direct debit.
Sign-up rewards are often paid within a certain timeframe, provided you meet the terms and conditions. Ongoing bonuses are generally paid on a monthly basis, so long as you remain eligible. Exact terms differ, so be sure to thoroughly research your chosen provider.
What Incentives Do Rewards Accounts Offer?
There is a variety of rewards that you can receive from your banking provider.
Below, we’ve highlighted some of the most common ones:
Switch bonus
Many high-street providers will offer customers a cash bonus if they switch accounts. There are often strings attached to this, such as a pay-in threshold you have to meet, other services (such as online banking) you have to use, or direct debits that you have to set up. It also usually takes a while for you to get your money.
Monthly flat cashback
Some banks will give you a monthly cashback incentive for using their account. The exact amount differs between providers and again depends on certain stipulations being met.
Monthly cashback %
A few institutions offer a set percentage amount of cashback on your bills. These are usually household costs such as electricity bills, mobile phone bills, and mortgage payments. The exact rate and amount you’ll receive depends on the bank and your situation.
In-credit interest rates
You can also find banks that provide preferential interest rates if you opt for their savings account too. As with the other offers, the exact rate depends on the account you choose.
What Makes a Good Reward Account for You?
As with any financial product, the account that’s best suited to you will depend somewhat on your circumstances. Although many of the incentives and rewards seem appealing on the surface, you’ll want to make sure that you can fully meet the requirements.
Don’t forget, the majority of these accounts will charge a small monthly fee. You need to ensure that the benefits for you outweigh the costs in the long run.
We’ve highlighted some key points to look out for when choosing the best reward account for you:
Minimum monthly pay-in
Many of these accounts require you to pay a certain amount of money in each month in order to qualify for the rewards. The exact amount varies greatly, but it can often be a few hundred pounds. If your paycheque goes into the account, it doesn’t matter so much, but if not, you’ll have to assess your options.
Direct debits
Another common qualifier to access the accounts’ benefits is to have a certain amount of direct debits set up. It’s usually only a couple, but if this isn’t your main account, you’ll need to take extra steps to balance your monthly payments.
Other services
Some banks require you to make use of their other services to remain eligible for rewards. Often, this means you’ll have to log in to your online or mobile banking account every few months. It’s not a massive inconvenience, but if you don’t regularly do it, you’ll need to remember to.
With these points in mind, you should find an account that gives you the best overall experience and value for your position. Compare your options, and weigh up the positives.
How to Switch Accounts
Under the Current Account Switch Service (CASS), you can transfer your account between banks for free. It’s a really simple service to use, and the banks will take care of everything.
When you open your new account, you need to fill out a couple of forms and give details of your old account. You can specify a date you want the transition to happen, and your new provider will take care of the rest. The process takes 7 days, and you’re protected from any errors that may occur.
The Best Rewards and Cashback Bank Accounts for You
We’ve compiled a list of some of the best accounts you can find on the market today.
We highlight the pros and cons, as well as why we think they represent a good option. All information is accurate at the time of writing but may be subject to change. Contact the institution for further details.
1. NatWest Reward Account
| Pros | Cons |
|---|---|
| ✔️ £125 for switching. | ❌️ Must deposit £1,500 and log in to mobile/online banking to qualify. |
| ✔️ 2% cashback on selected household bills. | ❌️ £2 monthly fee for the account. |
Why we like it
The NatWest Reward account gives an excellent cashback incentive for switching. In addition, you can also get 2% cashback on most of your monthly household bills if you pay by direct debit. There are some catches; you have to pay £1,500 after you open the account, and you have to access their online or mobile banking.
Thankfully, the NatWest mobile app is one of the best out there, so it’s relatively hassle-free. One other slight downside is the £2 monthly fee.
2. Barclays Blue Rewards
| Pros | Cons |
|---|---|
| ✔️ Excellent range of cashback offers on direct debits, selected products, and shopping. | ❌️ You have to pay in £800 a month to be eligible. |
| ✔️ Fantastic variety of banking options. | ❌️ £3 monthly fee to access rewards. |
Why we like it
Barclays offer some excellent cashback offers to those switching to their Blue Rewards bank account. Although there is a £3 monthly fee, you can get a monthly cashback on your direct debits, a monthly cash reward on certain products, and 1% extra cashback when you shop with selected retailers.
The downside of this account is that you have to pay £800 per month to be eligible. This is fine if it’s your main account, but may not be feasible otherwise.
3. HSBC Advance Bank Account
| Pros | Cons |
|---|---|
| ✔️ Up to £200 free when you switch and stay. | ❌️ Must pay in a minimum of £1,750 per month. |
| ✔️ Interest and fee-free overdraft. | ❌️ Must use CASS, have two direct debits, and register for online/mobile. |
| ✔️ No monthly fee. |
Why we like it
HSBC offers one of the most generous rewards for customers. When you switch to using CASS and stay with the bank for at least 12 months, you’ll receive £200. The first £150 is given after an initial period and the additional £50 after a year. You’ll also get access to an interest and fee-free overdraft of at least £1,000.
The major drawback of this account is that you’ll have to pay at least £1,750 a month. This is one of the higher requirements, and you’ll have to do it for 12 months to receive the full cash incentive. Additionally, it’s only available to those who switch with CASS.
4. First Direct
| Pros | Cons |
|---|---|
| ✔️ Free gift worth up to £199 and no monthly fee. | ❌️ You have to pay at least £1,000 within 3 months to be eligible. |
| ✔️ Access a savings account that earns 5% AER. |
Why we like it
First Direct has an excellent reputation for banking in the UK. With their 1st current account, you’re eligible for a free gift that could be worth up to £199. Currently, they have Bose headphones and an Amazon Echo Dot to choose from. However, these are only available when you switch to CASS.
Customers are also eligible for a savings account with 5% AER and a £250 interest-free overdraft. There’s no monthly fee for the account. However, the one catch is that you have to pay at least £1,000 within three months of opening your account.
5. RBS Reward Account
| Pros | Cons |
|---|---|
| ✔️ Switch and get £125. | ❌️ £2 monthly fee. |
| ✔️ Up to 2% in rewards on household bills. | ❌️ £1,500 must be paid in to be eligible. |
Why we like it
RBS offers a very similar deal to NatWest. The £125 that you get is dependent on you paying in £1,500 and that you log into their online or mobile banking. For the 2% cashback, there are seven types of household bills you can claim it on, provided you pay by direct debit.
Unlike many of the accounts here, there is a £2 monthly fee. However, according to their website, average customers earn £83 a year in rewards.
