Best UK Bank Accounts for Cashback

A quick look at the best current accounts available in the UK for cashback.

Just like last time, I need to remind everyone that I’m not a qualified financial adviser! This is just information that I have gathered and put into practise myself. See my disclaimer for my information, and make sure you do your own research.

Last week I posted an article looking at the best current accounts to store your money and gain the highest interest rates. This week I wanted to continue along the same theme, this time looking at the best ways to maximise cashback when paying the usual monthly bills by direct debit. There are two main contenders, Santander and NatWest:

Santander 123 Lite Account

Key Points

£1 monthly fee
1% cashback on Council Tax, Santander mortgage payment and water
2% cashback on electricity, gas and Santander home insurance and life protection
3% cashback on broadband, mobile phone, home phone and TV
Pay in £500 per month
Minimum of two direct debits per month
Log on to online banking at least once every three months
Rewards get paid directly into your bank account

Santander also offer the 123 current account. This differs from the 123 Lite Account in two ways: it costs £5 per month instead of £1, and offers 1.5% interest on savings up to £20,000, as opposed to 0% interest. However, I strongly recommend that you avoid this account; the £5 monthly fee makes this a poor choice. You can get the same 1.5% interest with no monthly fee on up to £250,000 with Goldman Sachs’ new Marcus savings account, or you can make use of the various current accounts available that pay higher interest.

NatWest Reward Account

Key Points:

£2 monthly fee
2% cashback on broadband, Council Tax, electricity, gas, mobile phone, home phone, TV and water
Pay in £1500 per month and register for online banking
Cash in the rewards once you reach £5
Currently offering a bonus £125 if you switch to them

Which is better?

Obviously the differing cashback is going to make one account better for some people and worse for others. I’ve made a simple spreadsheet that can be used to compare the two accounts, which can be found here. The spreadsheet can’t be edited whilst on Google Drive, but you can download it as an excel spreadsheet and then do whatever you want with it. I thought it would be cool to try to embed the calculator onto the site directly, but that is far beyond my meagre website building skills! Maybe something to try to implement in the future.

Alternatively, you can visit both websites and use their own calculators:

Personally, I found that Santander were slightly better for me and also allowed me access to a 5% regular savings account, so I’ve been using them to pay all of our monthly bills. I also preferred the fact that they simply paid the cashback into your main account, and you didn’t have to worry about cashing out once you hit £5. However, the offer of £125 from NatWest just for switching to them was too good to pass up, so I opened an account with them anyway, and have been using it as my Matched Betting account. If anyone at NatWest has been paying attention to my account, they probably think I have a serious gambling problem, considering that the account isn’t used for anything else!

It’s also important to note that you will only receive cashback for bills paid by direct debit. For example, if you pay for gas and/or electricity using a pay as you go smart meter, or pay for your water all at once every six months, then those bills won’t be eligible.

Other accounts

There are a handful of other accounts that offer a fixed amount per month, which may be appropriate if you have very low / zero monthly bills:

TSB Classic Plus

TSB offer £5 cashback for each month that you pay out two direct debits, and another £5 cashback for each month that you use the card 20 times or more. The only requirement is that you pay in £500 per month. As I mentioned last week, they also offer a respectable 5% interest on up to £1500. I personally don’t bother with using the card though. I prefer to stick everything on my Tesco credit card to get as many Clubcard points as possible, but it may be something to consider for those that prefer to avoid using credit cards.

Barclays Blue Rewards

Barclays has a reward system that you can opt in to where, every month that you pay in £800 and pay out two direct debits, they will pay you £7. The account actually costs £3 per month, so the net profit is £4. However, they are currently running a promotion (ending on the 14th of November) where, if you switch an old current account to them, they will double the rewards that they pay out for the next year. In other words, you pay them £3 and then they pay you £14 each month for a year.