TSB launches cashback reward current account: should you consider it?

TSB has launched a new cashback-paying current account which offers a £5 reward each month for making 30 debit card payments online or in store.

Its new Spend & Save Plus account costs £3 a month and includes features such as fee-free spending abroad and a £100 interest-free overdraft.

There is also a free version, Spend & Save, which launched last September. This also pays £5 cashback per month, but only for the first six months, and it doesn't have as many perks.

Here, Which? looks at what the account offers in more detail, how it compares to other providers and whether you should switch.

What does TSB's new current account offer?

Spend & Save Plus is a fee-paying account costing £3 a month.

It includes the same features as the free Spend & Save account such as Savings Pots, Save the Pennies (an automatic spending round-up), Auto Balancer (which moves money from Savings Pots) and text alerts to help customers best manage their money, but also includes the following additional features:

• Ongoing cashback - customers can earn £5 cashback each calendar month as long as they make 30 payments using their debit card every calendar month - which can be online or in store.
• £100 interest-free arranged overdraft- if customers have spent more than they usually do, they won't be charged interest on the first £100.
• Fee-free spending abroad - there are no TSB charges for customers using their debit card at ATMs or at the checkout in another country.

Find out more:best bank accounts

How does TSB's cashback account compare?

A few banks and building societies offer cashback as an incentive to open or retain an account.

The NatWest and RBS Reward accounts cost £2 per month, and you can earn up to £5 per month. You can earn £4 for paying out two or more direct debits plus £1 for logging into the mobile banking app each month. You can only apply for a Reward account if you can pay in £1,250 each calendar month to any eligible NatWest/RBS account (excludes Foundation, Basic or Mortgage).

The Halifax Reward current account costs £3 a month (or is free if you pay in £1,500 a month) and pays £5 cashback if you pay in £1,500 a month and either spend £500 on your card or maintain a balance of £5,000 in a month.

The Barclays Blue Rewards account costs £4 per month and offers £7 cashback. However, you'd need to pay out two direct debits, and pay in £800 per month to unlock the reward.

• Find out more: take a look at our table showing the best current accounts for cashback, which includes expert analysis of the different offerings.

Is the TSB Spend & Save account worth going for?

Ultimately, you need to consider how much you can pay into an account each and how much you can afford to spend to enjoy the benefits. With TSB's Spend & Save Plus account you may not make 30 purchases a month, which is required to enjoy the rewards.

You should also consider what TSB's customer service is like and if it can meet your everyday banking needs. In our latest annual survey on the best and worst current account providers, TSB came 18th out of 24 providers, behind the likes of HSBC, Lloyds and Barclays.

While the bank wasn't a top scorer, everybody's banking needs are different, so some of its features may appeal to you. Perhaps you need an interest-free overdraft to pay off your debts, or you bank in-branch and know you'll have easier access to its services. Although, it's worth noting TSB recently announced that it is closing 164 bank branches in 2021.

If you already bank with TSB and are satisfied, consider upgrading to the paid account if you think you'll benefit from its features, can afford the monthly fee, and meet the requirements.

How to switch your current account

Most banks have agreed to use the current account switching service, which means it should take just seven working days to switch you over from your old account once the new account is opened.

If you want to check which banks and building societies are participating, you can search by name here on theCurrent Account Switch Service (CASS) website.

• Find out more:how to switch banks