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

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