The bank accounts that pay you

Piggy bankBanks are increasingly paying cash incentives instead of interest to their current account customers.

NatWest and Royal Bank of Scotland (RBS) are the latest to join this growing trend. They are now paying cashback when current account customers spend on their debit cards in certain retailers.

Let's take a look at how their new scheme works and some other top current accounts that pay you for using them.

NatWest and Royal Bank of Scotland Select accounts
The new Cashback Plus scheme is available to new and existing customers of the following accounts: NatWest Select, NatWest Select Silver, NatWest Select Platinum, NatWest Black, RBS Select, RBS Select Silver, RBS Select Platinum, RBS Black.

The NatWest Select and RBS Select accounts don't charge a monthly fee. All of the others are packaged accounts, which offer additional benefits in return for a monthly charge.

Each time you spend using your NatWest or RBS debit card with a participating retailer in-store or online you get up to 1% of the value back in the form of Reward points.

Once you have built up the equivalent of £5 or more in Rewards, you can redeem it in one of three ways:
  • Bank it: convert the Rewards into cash and have it paid into your account.
  • Donate it: convert the Rewards into cash and donate to a selected charity like Macmillan, NSPCC, Barnados or Cancer Research.
  • Trade up: get a higher value gift card or voucher. For example, you can currently get a £10 H Samuel gift card for £5-worth of rewards.
However, the Cashback Plus scheme is only available with 11 retailers at the moment. More are expected to join soon.

Santander 123 account
The Santander 123 current account offers money back in two ways. Firstly, if you have an in-credit balance you'll earn up to 3%. It pays 1% on balances from £1,000 to £1,999, 2% on balances from £2,000 to £2,999, and 3% on balances from £3,000 to £20,000.

You can also earn some money back on your household bills: 1% on water, Council Tax and Santander mortgage repayments (up to a maximum of £1,000 a month); 2% on gas and electricity bills; and 3% on mobile, home phone, broadband and paid TV contracts.

To qualify, you must fund the account with at least £500 a month and set up at least two direct debits (although you'll want to set up all your eligible bills if you want to earn cashback on them). You'll also be charged a monthly fee of £2, so make sure you'll earn enough cashback and/or interest to more than cover this.

First Direct 1st account
First Direct is now offering new customers a £125 joining bonus if you open a 1st Account.

To qualify for the account fee-free you'll need to pay in £1,000 a month. Alternatively, you'll need to have another First Direct product – such as insurance.

Fail to keep up the minimum monthly deposit and you'll be hit with a £10 monthly fee – so make sure you pay in the minimum £1,000 each month or the £10 charges will soon wipe out the £125.

The good news is the 1st Account has won several awards for customer service, and in the unlikely event that you don't like the bank and decide to leave anytime between six months and a year after opening the account First Direct will pay you £100.

Halifax Reward account
Halifax has just extended its £100 switching offer for moving to its Reward current account to the end of the year. What's more, you'll earn £5 a month, providing you credit the account with £750 each month, pay out at least two Direct Debits per month and were in credit the previous month. However, the offer's only available to existing Halifax customers and new customers who already have a current account with another bank, which they'll need to close.

If you prefer to earn interest
If you do have a bit of money left aside each month, you might want to take a look at the Nationwide FlexDirect account. This is currently paying 5% before tax on credit balances of up to £2,500 for the first year you have the account. That's miles better than the top easy access savings accounts right now.

You need to pay in £1,000 a month to qualify.

See how the top bank accounts compare

10 consumer rights you should know
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The bank accounts that pay you

The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.

This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.

Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".

Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.

If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.

If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.

After this point, you can only really expect an exchange, repair or part-refund.

The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).

Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

The FOS settles disputes between financial companies such as banks and consumers.

If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.

The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.

Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.

They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.

What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.

You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.

Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.

They cannot, for example, enter your home and take your possessions in lieu of payment.

In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.

Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.

You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.

You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.

We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.

In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.

Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.


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