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Best bank accounts for cashback

If you want more from your bank, take a look at our table showing the best current accounts for cashback and other rewards.

In this article
Best current accounts for cash rewards Barclays Blue Rewards in detail Santander 123 in detail NatWest and RBS Reward in detail
Maximising current account rewards Are current account rewards taxable? Should I open a joint account for cashback?

Best current accounts for cash rewards

Many banks and building societies offer cashback on monthly bills and loyalty rewards as an incentive to open or retain an account. 

We show the best offers in the table below.

If you’re looking for a bank account with extra benefits such as travel insurance or car breakdown cover, see our comparison of the best – and worst – packaged bank accounts.

Provider Account
name
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Max Monthly
cashback
Monthly
fee
Barclays

 

More info

To earn £7 a month, you need to pay out two direct debits, pay in £800 and cover the £4 Blue Rewards fee (was £3, increased on 1 July 2019). Additional cashback available if you own other Barclays products, see product for further details. 

Blue
Rewards
68% £7 £4
Chase

 

More info

You can join the waiting list (visit www.chase.co.uk) for the newly launched UK current account from US investment bank JPMorgan Chase. The account has no monthly fee and offers 1% cashback on debit card purchases for 12 months (exclusions apply e.g. cryptocurrencies, estate agent fees and gambling transactions). Other perks include: no debit card fees on transactions or ATM withdrawals abroad and 5% on  'round-up' savings. Chase automatically rounds up your spending to the nearest £1 and saves the difference for you (you xan’t make additional payments into the savings pot and after a year the balance will be automatically transferred to your Chase current account so you won't earn 5% on a large balance).  Must be 18+ and have a smartphone as accounts are operated via a mobile banking app (no branches). 

Chase - 1% on debit card spending for a year Free

The Co-operative Bank

 

More info

Everyday Rewards previously paid up to £5.50 per month but this was reduced first in 2020 and again in July 2021. Now you can earn a maximum of £2.20/month. You get £1 (was £2) plus 2p (was 5p) when you use your debit card to pay for things (up to 60 transactions per month, max £1.20) if you: pay in £800, pay out four direct debits, opt for paperless statements, log in to online/mobile banking, and stay within your overdraft limit. 

Everyday
Rewards
68% £2.20 Free
Danske Bank

 

More info

£7/mth, if you pay in £1,200, pay out three direct debits and log onto online or mobile banking at least once a month. This account can be opened online but branches available in Northern Ireland only. If you’re a new Danske Bank customer, you must be living in Northern Ireland (existing customer must be living in the UK). 

Reward 66% £7 £2

Halifax

More info

On 1 July 2020, Halifax launched 'Reward Extras' which lets you choose to be rewarded with £5/mth cashback for either spending (£500+ on your debit card) OR saving (if you keep your balance at £5,000+). Alternatively, you can opt for one of these monthly reward benefits: one free Vue cinema ticket; two film rentals via Japanese streaming service Rakuten TV; three digital magazines. Whichever reward you choose, you will need to pay at least £1,500/mth into your account, up from £750 previously. 

Reward 70% £5 or monthly reward benefit e.g. free Vue ticket £3 (free if you pay in £1,500/mth)
NatWest

 

More info

As of 1 Feb 2020, you can earn £4 for paying out two or more direct debits plus £1 for logging into the mobile banking app each month. Also pays 1% cashback on spending at certain retailers. You can only apply for a Reward account if you can pay in £1,250 each calendar month to any eligible NatWest account (excludes Foundation, Basic or Mortgage). 

Reward 69% £5 £2
Royal Bank of Scotland

 

More info

As of 1 Feb 2020, you can earn £4 for paying out two or more direct debits plus £1 for logging into the mobile banking app each month. Also pays 1% cashback on spending at certain retailers. You can only apply for a Reward account if you can pay in £1,250 each calendar month to any eligible RBS account (excludes Foundation, Basic or Mortgage). 

Reward 61% £5 £2
Santander

 

More info

1-3% tiered cashback paid on household bills paid by direct debit as long as you pay in £500, pay out two direct debits and log in to online or mobile banking at least once every three months. The 123 Lite account fee rose to £2/mth from 27 Oct 2020 (was £1). The full Santander 123 account pays interest at 0.3% on up to £20,000, for a higher monthly account fee of £4. Both the full account and Lite version cap cashback at £5 per cashback tier (so max £15 per month overall).

123

123 Lite

 

63% 1% - 3% on bills

£4 (123)

£2 (123 Lite) 

TSB

 

More info

Earn £5 cashback for the first six months only (including the month you open your account) when you make 30 debit card payments or more each calendar month.

Spend & Save 63% £5 for first six months Free
TSB 

 

More info

Earn £5 cashback for every month you: make 30 debit card payments online or in-store. Account benefits include £100 interest-free arranged overdraft; fee-free spending and ATM withdrawals abroad; and various account management tools. 

Spend & Save Plus 63% £5 £3

 

Data correct as of September 2021.

Which? Customer Score: Our rating for customer satisfaction, based on feedback from real customers. The score is made up of a customer's overall satisfaction with the brand, and how likely they are to recommend that brand to a friend. We surveyed 4,501 members of the general public in September 2020. Our full table includes scores and star ratings for all banks. 

Barclays Blue Rewards in detail

Barclays Blue Rewards scheme can be added to all accounts except Basic, Young Person's, BarclayPlus, foreign currency accounts, Wealth and Business.

The headline offer is cash for setting up monthly direct debits - you can earn £7 per month for two direct debits (£3.50 each). 

But, the more products you hold with Barclays, the more cashback you will earn: 

  • £5 per month for a Barclays mortgage,
  • £5 per month for life insurance with critical illness cover (£1.50 for standard life insurance),
  • £1 per month for a personal loan, 
  • 3% when you take out or renew home insurance.

Members can also open a 'Barclays Blue Rewards Saver' which pays 0.15% in any month you don't make a withdrawal (falling to 0.01% if you make one or more withdrawals). See if this rate can be beaten using the Which? Money Compare savings tables

Once you’ve signed up, you’ll only earn Blue Rewards if you pay in at least £800 and pay the monthly £4 fee (taken from your nominated account on the second working day of each month).

Santander 123 in detail

Both the Santander 123 account and the 123 Lite account pay up to 3% cashback on selected household bills, capped at £5 per cashback tier per month:

  • 1% cashback on mobile and home phone bills, broadband and paid-for TV packages and the first £1,000 you pay towards a Santander residential mortgage. 
  • 2% cashback on gas and electricity bills, Santander home insurance and Santander life protection.
  • 3% cashback on water bills. 

Spending on your Santander debit card can also bag you additional cashback of up to 15% at a range of major retailers. 

You'll need to pay in £500 every month to earn these benefits and have at least two active direct debits. Lite customers must also log onto online or mobile banking at least once every three months. 

The full account costs £4 per month but it pays 0.3% interest on credit balances (compare high interest current accounts here).

 

Santander 123 Lite

 

If you don't want to use the account for savings, the Lite account pays cashback on bills (but no credit interest) for only £2 per month.

To be eligible, you'll need to pay in at least £500 into your account every month, have two active direct debits set-up, and log in to online or mobile banking at least once every three months. 

NatWest and RBS Reward in detail

Previously, the NatWest and RBS Reward accounts paid 2% cashback on household bills paid by direct debit but this perk was scrapped in February 2020. 

Now, you can earn £4 for paying out two or more direct debits (valued at £2 minimum), plus £1 for logging into the mobile banking app each month. Both banks offer 1% cashback on spending at certain retailers as well.

You must pay £1,250 into the NatWest or RBS Reward current account each month to qualify for the perks.

Your 'Rewards' become available to spend once you’ve earned the equivalent of £5 or more.

At this point you can choose to either: bank it so that the money is transferred to your current account; trade for gift cards and shoppping codes to use at selected retailers; or donate it to a participating charity.

Maximising current account rewards

Many providers ask you pay in a minimum amount each month or maintain a certain number of direct debits to be eligible for current account rewards.

In some cases, you may need to hold other products with that provider, such as a mortgage, personal loan, or insurance, to benefit fully.

Compare rates to the rest of the market as you may be better off holding these products with other providers, even with the extra cashback.

Watch out for fees being increased, or benefits being chopped and changed. If they are, take the time to reassess whether the account is still working for you and consider switching if the benefits no longer stack up.

Are current account rewards taxable?

Some rewards are considered taxable by HM Revenue & Customs (HMRC) and some aren’t. It all comes down to how the taxman categorises rewards for tax purposes. Broadly, there are three possibilities:

  • Annual payments: taxable and paid with basic-rate tax deducted at source
  • Miscellaneous income: taxable but paid without tax deducted
  • Neither annual payments nor miscellaneous income: not taxable and paid without tax deducted

HMRC explained to Which? that it would only expect current-account rewards to be annual payments if they continue for more than a year and the customer does not pay a fee for holding the account.

Cashback on household bills, offered by the likes of Santander and NatWest, are essentially a discount on goods or services, not income – so there is no tax to pay.

For annual payments, you don’t owe any extra tax if you are a basic-rate taxpayer. If you pay tax at higher or additional rates you should pay the additional amount over and above the tax deducted at source if you receive rewards with basic-rate tax deducted.

If you are a non-taxpayer, you can reclaim any tax deducted by using the R40 form or on your self-assessment tax return if you complete returns.

 

Halifax and Co-operative Bank

 

Both Halifax and The Co-operative Bank offer rewards that fall into the ‘annual payments’ category, which means they deduct basic-rate tax of 20% before paying rewards.

The gross monthly reward for the Halifax Reward account is £6.25, but you receive a net reward of £5. The gross monthly reward for the Co-operative Bank Everyday Rewards account is £1.25, but you receive a net reward of £1.

Should I open a joint account for cashback?

Unlike interest-paying accounts, there’s little to be gained by opening multiple cashback current accounts, as banks tend to restrict benefits.

For example, the Barclays Blue Rewards scheme pays £7 cashback a month for maintaining two direct debits, plus varying levels of cashback for holding extra Barclays products, but customers can only hold one Rewards Wallet each.

Similarly, you can only nominate one account to receive Co-operative Bank Everyday Rewards.

 

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