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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 Santander 123 in detail NatWest and RBS Reward in detail Barclays Blue Rewards 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
undefined Max Monthly cashback Monthly
fee
Barclays

 

More info

To earn £5 a month, you need to pay out two direct debits, pay in £800 and cover the £5 Blue Rewards fee. Additional cashback is available if you own other Barclays products, see below for further details. 

Blue
Rewards
65% £5 £5
Chase

 

More info

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 can’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
70% £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. Branches are in Northern Ireland only. If you’re a new Danske Bank customer, you must be living in Northern Ireland (existing customers must be living in the UK). 

Reward - £7 £2

Halifax

More info

Halifax launched 'Reward Extras' in July 2020, 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 67% £5 or monthly reward benefit e.g. free Vue ticket £3 (free if you pay in £1,500/mth)
NatWest

 

More info

Since 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 must pay in £1,250/mth to any eligible NatWest account (excludes Foundation, Basic or Mortgage). 

Reward 67% £5 £2
Royal Bank of Scotland

 

More info

Since 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 must pay in £1,250/mth to any eligible RBS account (excludes Foundation, Basic or Mortgage). 

Reward 57% £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 1% 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

 

66% 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 every month. Linked Savings Pots earn 1.25% AER.

Spend & Save 59% £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. Linked Savings Pots earn 1.25% AER.

Spend & Save Plus 59% £5 £3

 

Data correct as of August 2022

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 4,438 members of the general public in September to October 2021. Our full table includes scores and star ratings for all banks.

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 each month:

  • 1% cashback on mobile and home phone bills, broadband and paid-for TV packages council tax, 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 123 account costs £4 a month but it pays 1% interest on credit balances up to £20,000 (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 a 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 it for gift cards and shopping codes to use at selected retailers; or donate it to a participating charity.

Barclays Blue Rewards in detail

Barclays Blue Rewards has become considerably less generous over time.

The monthly fee is now £5 (was £4) and you only earn £5 cashback for maintaining two active monthly direct debits (was £7). You must pay at least £800 into your Barclays account every month to be eligible for Blue Rewards. 

The only way to earn more cashback, is to hold other products with Barclays: 

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

You can also open a linked 'Barclays Blue Rewards Saver' which pays 1% in any month you don't make a withdrawal (falling to 0.01% if you make one or more withdrawals).

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

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 might 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 HMRC 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 doesn't 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 cashback for any month you maintain 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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