Current accounts with rewards
What if you could choose the benefits you prefer for your current account? We're not quite there yet, but there are a few options out there. Let's have a look.
From switching incentives to cashback on your bills, you just have to pick your favourite perk and figure out how to make the most of it.
How do rewards current accounts work?
It very much depends on the deal you’re looking at and on the benefits you’re trying to secure. As a rule of thumb, you’ll only get the rewards or benefits if you use the account as your main account, so your bank may ask you to meet certain conditions, such as paying a certain sum into the account every month or having a certain number of direct debits with it.
Moreover, rewards current accounts often feature great introductory offers that are meant to attract new customers but will expire after a year. If that’s the case, don’t forget to set an alarm on your calendar and compare accounts again.
Finally, depending on the perks and benefits you’re interested in, the account may also charge a monthly fee.
Which benefits can I get with my current account?
Depending on what your financial life looks like, some perks may be more rewarding than others, so try to think about how you would use them, not just which is the best in general.
This technique used by banks to snatch customers from each other isn’t exactly subtle, but it’s good news for us. At times, you can get up to £175 in cash just to use the CASS (current account switch service) to move your main current account from one bank to the other.
Switching through CASS is free and isn’t much of a hassle: once you’ve given all your details to your new bank, it will handle the process within seven working days, including redirecting all your incoming payments, transferring your direct debits and closing your old account.
Believe it or not, some current accounts do pay an interest on balances. Yay. However, all that glitters is not gold, and banks usually cap the balance up to which the interest is paid.
For this reason, they’re able to offer better rates than they can on easy-access savings accounts; but if you’re a regular saver, you’ll probably reach the limit fairly quickly and will need a savings account anyway.
This is a fairly common current account feature, but it doesn’t usually apply to all your debit card spending. You’ll get cashback when you shop at a bank’s partner retailers instead, so it’s worth checking them out in advance and see if there are any you like in the list.
With some current accounts, you can get cashback on your bills, which can be quite rewarding if you’re the person in charge of paying them in your household. It also means that you can predict quite precisely how much you will earn in cashback every month.
Other perks and benefits
You can easily secure a current account that also offers some kind of insurance package (for example travel insurance, device insurance or breakdown cover), but it will almost certainly come with a monthly fee.
If you’re considering this, you should see how much it would cost to pay for the insurance independently first, think about how often you’d need it (no point in paying for travel insurance for a whole year if you only go on holiday at Christmas) and weigh up the pros and cons.
Am I eligible?
You should always check the eligibility criteria carefully before applying for a rewards current account. Specific criteria will depend on the bank you’re considering, but they’ll usually involve paying a certain sum into the account every month.
Moreover, many banks only offer their best perks and benefits to top-tier customers (those that pay a high annual salary into their accounts or have a certain amount in savings with the same institution) to whom they offer so-called “premium accounts”. They’re packed with enticing features, but unfortunately most of us won’t qualify for them.
Rewards current accounts fees
With rewards current accounts, you should expect two main kinds of fees:
- Monthly fees. Not all rewards current accounts will charge one, but you should definitely expect it if you’re after the best benefits.
- Foreign currency transaction fees. Finding a rewards current account that allows fee-free spending abroad is like looking for a needle in a haystack, so you may want to open a separate current account or get yourself a credit card that doesn’t charge foreign transaction fees for when you travel abroad.
If the account you’re considering comes for a monthly fee, you’re in for some maths to try and figure out if the benefits you’re after are worth the price. Will you spend enough in bills to make it worth it? How much would it be to purchase insurance independently?
Frequently asked questions
Read more on this topic
Current accounts: A to Z listing of banks and building societies Looking for a current account? Compare current accounts with this A to Z listing from the UK's best-known banks.
Nationwide overdraft charges: higher interest rate on arranged overdrafts applies from today Nationwide is increasing its charges on arranged overdrafts in response to the regulator's decision to make fixed overdraft fees illegal.
Graduate bank accounts What happens to your bank account once you graduate? What's the best overdraft deal you can get? Learn all you need to know about graduate bank accounts.
Packaged bank accounts A packaged bank account is the fastest way to get travel insurance, mobile insurance and breakdown cover all in one go. But is it the cheapest?
Current accounts for people with bad credit Having bad credit isn't ideal, but at least when it comes to bank accounts, you have a range of options. We've explored them to help you find the best one.
International bank accounts Moving out of the country? Planning an investment abroad? An international bank account may solve your problems if you find the right one.
Bank accounts for kids All you need to know about current accounts for under 18s, from why they can make a good educational choice to what you need to open one.
Current accounts with overdrafts Learn all you need to know about your current account's overdraft, from costs and fees to how to apply for one.
Joint bank accounts Ready to take the plunge and open a joint current account with your other half? Learn how they work, how to open one and what happens if you split up.
High interest current accounts Getting a good rate on your account balance is hard but not impossible. We've looked at the advantages and catches of high interest current accounts.