Which account will earn you the most money back on your bills?
There are lots of good reasons to change your bank, including cash bonuses, high interest, fee-free travel money and low-cost overdrafts.
One feature that’s also available is getting cashback on the bills you pay. So you could get 1% back on your Council Tax or water bills. It’s stuff we all pretty much pay for.
Since this type of account was introduced I’ve always said it makes sense for us to all have one of these current accounts – all offered by Santander.
If you’re looking to open a new account you can choose between the Edge or the Edge Up, while some of you might still have the 123 or 123 Lite.
So which is better? This article will help you decide on the best paying option for you.
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Santander cashback current accounts compared
First a look at what these accounts offer. The focus of this article is on the cashback on bills, but as you’ll see some of them offer extra ways to earn money.
Available to all customers
Santander Edge
The Edge doesn’t just offer cashback on bills as you can get money back on some spending and a decent interest rate.
I wouldn’t bother with the debit card cashback as you can earn the same rate elsewhere without the caps and retailer restrictions. The interest could be worth grabbing – as long as you’re covering the fee with your cashback.
The Edge Saver is unbeatable for the first year – though you do need to factor in the fee if that’s not covered by cashback Here’s more on the Edge Saver account (full review)
You can read my full Santander Edge review here.
| Monthly Fee | £3 |
| Interest % | 7% (including 2.5% bonus for 12 months) on balances up to £4,000 via a separate Edge Saver account |
| Cashback (capped at £10 per tier each month) | 1% on Council Tax, phone, mobile, TV and broadband, gas and electricity, and water bills |
| 1% back on spending at supermarkets and on travel (trains, buses & fuel) | |
| Requirements | Pay in £500 a month |
| Pay out at least two Direct Debits |
Santander Edge Up
The Edge Up keeps the same cashback rates, but increases the monthly cap to £15 a month. On
There’s no access to the Edge Saver. Instead you can earn 3.5% interest in the account on a hefty balance, but that can be beaten by savings rates at other banks.
You can read my full Santander Edge Up review here.
| Monthly Fee | £5 |
| Interest % | 3.5% on balances up to £25,000 |
| Cashback (capped at £15 per tier each month) | 1% on Council Tax, phone, mobile, TV and broadband, gas and electricity, and water bills |
| 1% back on spending at supermarkets and on travel (trains, buses & fuel) | |
| Requirements | Pay in £1,500 a month |
| Pay out at least two Direct Debits |
Only available to existing customers
Santander 123
The Santander 123 current account is no longer available to new customers, but if you’ve already got one it’ll still earn you money back on your bills.
The 123 pays more cashback on some bills than the Edge, and you can earn money on Santander mortgages too. However, it comes with a higher fee and lower interest rates. I wouldn’t use this at all for interest as the rate can be easily beaten elsewhere.
| Monthly Fee | £4 |
| Interest % | 2% on balances up to £20,000 |
| Cashback (capped at £5 per tier each month) | 1% on Council Tax, phone, mobile, TV and broadband bills and Santander mortgage repayments |
| 2% on gas and electricity | |
| 3% on water bills | |
| Requirements | Pay in £500 a month |
| Pay out at least two Direct Debits |
Santander 123 Lite
This account is no longer available to new customers, but if you’ve already got one it’ll still earn you money back on your bills and with the lowest fee of the lot, so you need to know what it offers in comparison to the others.
| Monthly Fee | £2 |
| Interest % | None |
| Cashback (capped at £5 per tier each month) | 1% on Council Tax, phone, mobile, TV and broadband bills and Santander mortgage repayments |
| 2% on gas and electricity | |
| 3% on water bills | |
| Requirements | Pay in £500 a month |
| Pay out at least two Direct Debits | |
| Sign in to your online or app banking every three months | |
| Go paperless |
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Santander bills cashback: How much can you make?
The amount you earn depends on the size of the bills. If you’re a high bill payer, you’ll get more. But if you’ve been savvy and shopped around to get the best deal, you’ll earn less.
Obviously there’s the chance to earn more from the 123 and 123 Lite due to the higher paying rates on gas, electricity and water. Plus if you have a Santander mortgage there’s extra you can earn there too.
However all three accounts have caps. For the 123 and 123 Lite it’s £5 cap per category, so the most you can possibly make each month is £15 – though for most homes that’s unlikely. The Edge caps bill cashback at £10 a month.
To work out how much you’ll make personally you’ll need to get your bills and put them into the cashback calculators on the Santander websites. Don’t forget to factor in the monthly fee, which will show in the calculator.
Santander cashback calculators
You can use a calculator on the Santander website to work out your return from both the Edge and Edge Up. It’s possible to also compare how much you’ll make to either the 123 or 123 Lite.
You’ll find this in the “Cashback” section when you click the arrow to expand. This calculator also has the option to work out how much you’d earn from debit card cashback and interest on savings, but I’d leave this blank unless you really don’t want to get better rates elsewhere.
A quick note: For Council Tax the cashback is calculated as if you pay it over 10 months rather than 12. Though the former is the default way I’ve always preferred the consistency of every month. If you pay by 12 months then you’ll need to multiply the amount you pay by 12, then divide by 10, and put that figure in the calculator. This applies to all three accounts.
What to watch out for
Though the categories of cashback are quite broad and cover lots of bills, not every supplier will be included. For example, Giffgaff doesn’t appear in the eligible supplier search form. Do check how your supplier appears on your bank statement as that might be what’s listed.
Also, if you split bills with a partner or housemate and you pay from separate accounts then you won’t get the full benefit of this type of account. You could open up a joint account for these key bills, though there are risks you need to be aware of.
What I’d make in cashback on bills
Which account would be best for me?
If you’re a regular reader you won’t be surprised to know I’ve got as good a deal as possible on all my bills. I switch energy provider frequently (well, I did when this was possible) and ditched pay TV years ago. Plus I’ve haggled low prices on broadband and mobile phones.
Our water is on a meter and my Council Tax is quite high, but there’s not a huge amount we can do to reduce these further.
| Bill | My monthly cost | 123 Lite monthly cashback | 123 monthly cashback | Edge monthly cashback | Edge Up monthly cashback |
| Council Tax | £228 | £2.28 | £2.28 | £2.28 | £2.28 |
| Broadband | £28 | £0.28 | £0.28 | £0.28 | £0.28 |
| Mobile Phones (x2) | £16 | £0.16 | £0.16 | £0.16 | £0.16 |
| Gas & Electricity | £250 | £5 | £5 | £2.50 | £2.50 |
| Water | £40 | £1.20 | £1.20 | £0.40 | £0.40 |
| Monthly fee | -£2 | -£4 | -£3 | -£5 | |
| MONTHLY TOTAL | £6.92 | £4.92 | £2.62 | £0.62 | |
| ANNUAL TOTAL | £83.04 | £59.04 | £31.44 | £7.44 |
Cashback on bills vs interest in account
There is a extra option to consider. If your current account pays interest on the balance held there (rather than in a separate account that you’d have to transfer money over for), how much would that make? Could it better just to do that and forget about the cashback? Or does this help make the Edge Up more appealing as you’d automatically get both.
Let’s use my bills total from the table above, which comes in at £562 a month. If I left that cash in my account all month, and paid the direct debits on the last day, a rate of 3.5% (as Starling or the Santander Edge Up offers) would earn £19.67 interest if I did the same every month of the year.
That’s still not enough to chose this approach instead, or go for the Edge Up. You can of course combine the interest from Starling (or any other account) with cashback from Santander, by keeping the money in that account for as long as possible before you need to transfer it so the direct debits are paid.
Santander Edge accounts vs other interest rates
The table below shows how much interest you’d earn on £1,000, £4,000, £10,000, £20,000 and £25,000 when held in either the Santander 123, Santander Edge, Edge Up or a decent top-paying easy access account (at the time of writing) of 5%. The 123 Lite doesn’t pay interest.
These figures are without the fee, as I’m assuming that this is covered by the cashback you earn each year. If you aren’t earning the cashback I don’t see much point in using either the Edge or 123 for your savings.
The only exception is when you have a joint account which allows you to open two Edge Savers, and have at least £4,500 across the two accounts. And remember the 7% is only for one year and it then drops to 3.5%.
Anyway, back to the returns:
| Amount saved | Interest earned in Santander 123 (2% up to £20,000) | Interest earned in Santander Edge Saver (7% for 1st year only up to £4,000) | Interest earned in Santander Edge Up (3.5% up to £25,000) | Interest earned in 5% paying account |
| £1,000 | £20 | £70 | £35 | £50 |
| £4,000 | £80 | £280 | £150 | £200 |
| £10,000 | £200 | £280 | £350 | £500 |
| £20,000 | £400 | £280 | £700 | £1,000 |
| £25,000 | £400 | £280 | £875 | £1,250 |
It’s clear the Edge pays the most on up to £4,000, and for balances above that you’d want money in the best easy-access account.
Summary: Which is the best Santander account for you?
Should you get a Santander Edge or Edge Up account?
Let’s assume you don’t already have any of the accounts above (we’ll come back to whether you should swap from existing 123 accounts in a bit).
As long as you are paying those bills, and you’ll earn more than the monthly fee, it’s well worth getting one of these accounts. My preference is to go for the Edge as it’s cheaper and the extra features on the Edge Up won’t justify the additional £24 a year.
But I wouldn’t use it as my main account. There are far better options when it comes to the app and banking experience, plus a few with more lucrative extras.
Personally I’d set this up as an additional account solely to pay the bills. A standing order from your main account can transfer over the required cash each month, which will cover those bills.
Most of these bills are set amounts that won’t change without notice, so it requires little ongoing maintenance. Though obviously you’ll need to make sure you cover ones that can change each month – for example an increased mobile phone bill, or any annual increases to those bills (usually in April of each year).
Should you swap a Santander 123 for a Edge account?
The Santander 123 and 123 Lite current accounts closed to new customers in June 2023, but existing customers can keep their account open and continue to earn cashback.
I’d choose to keep hold of this account rather than opting for the Edge, especially if you have the 123 Lite. You’ll earn more back every month thanks to the higher rates on some bills.
Andy’s Analysis: Edge, 123 or 123 Lite?
If you have a 123 Lite then I’d absolutely keep it. If not, then my instinct is that the 123 will be the better account. That’s because despite a higher monthly fee you’ll get more cashback on energy bills, which can really add up while bills are so high.
Even if you’re also tempted by the Edge for the cashback at the supermarket, I’d look at alternatives that will earn you the same 1% at many more retailers.
And though the interest rate on the Edge Saver is hard to beat, I don’t think it’s enough to compensate for the lower cashback on your bills.
Santander switching bonus
Santander launched its first proper switching bonus in late 2021. The most recent offer, in March 2024 is for £185. This is a decent deal and is open to existing customers.
The offer can come and go, and it might be beaten by other banks so do check my ultimate list of bank switching offers.
Great article! Do you know if I can to a partial switch to these accounts? I have to keep my old bank account open. Thanks!
The interest rate has just gone up to 1% on the full 123 account
Hi Andy,
Great article!
If I downgrade to a Lite account, what are the consequences of not logging in every 3 months? Does the app count as a login is is it just the Web? Will they warn me if I have not logged in after say 2 months?
Thanks in advance.
Hi Andy – thanks it so great to have an easy comparison – I also switched from the 123 to the Lite after changing Mortgage providers. In fact I circulate through three banks each month getting the benefits – Barclays have a great online app with a header feature that lets you see at a glance forthcoming payments (extremely useful tool with planning – no more scrolling through the statements) and various insurance packs; then to Club Lloyds which gives you a lifestyle reward (choose one from
6 x cinema tickets at ODEON or Vue cinemas
1 x annual digital Gourmet Society membership
An annual magazine subscription
12 x digital movie rentals), tiered interest and cashback options; then to the Santander Lite with its cashback benefits. This took a bit of setting up with the various conditions but now works like a dream!!!
Fantastic. Take a look a Halifax Reward too, £5 or a cinema ticket every month https://becleverwithyourcash.com/halifax-reward-accounts-to-change-is-it-any-good/
Not a fan of this current account as you have to use it to spend £500 a month just to her this bonus. I’d rather use my Am ex card
I had a Santander account and switched to nationwide to get the £125 bonus. Can I now swap back to Santander to get the £140 bonus?
Potentially. You’ll need to apply for a new account with Santander, but as long as they give you the account and you’ve not had the switching bonus from them before, you will qualify
Hi. Re the £500 pay in eligibility – Can I just transfer £500 via direct debit into the Lite account, and then transfer it out again via direct debit straight away? If so, what is the least amount of time the £500 needs to be in the account – can I literally set up a direct debit pay in of £500 on the … 5th of each month lets say, and then have another direct debit removing it from the account on the 6th? Thanks.
Yes, though you’ll also need money to cover the bills and the monthly fee!
So even if you have the full £20k and cashback from bills, it seems that it’s still worth it to downgrade to the 123 Lite?
I think so, and putting your savings in a free savings account. Even if it offers the same as the 123 you’re still better off.
Hi Andy which free savings accounts do you recommend?
Never saw this coming! I have a two-year fixed-rate ISA linked to my 123 account,
which now pays what turns out to be a fantastic rate of interest.
How would that be affected by a downgrade to 123 Lite?
No point phoning for help, as there isn’t any!
Hi Barrie, it shouldn’t make a difference unless that initial fixed-rate ISA was explicitly for the main 123 and the Lite.
If I switch from 123 to lite, and continue to pay in £500 per month and continue with my two direct debits, and keep enough in the account to meet my monthly outgoings, can I move all the rest to a savings account of my choice. And there is no stipulation for me to keep £20k in the account.
Yes you only need to have money in the account to pay the bills – anything else can be moved for a better rate!
For me it won’t be worth having either of the 1 2 3 accounts so I am thinking of changing to a Santander ordinary current account. Hopefully I can keep all my direct debits and so on in the new account but I am not sure. Does anyone know?
Yes, they should be able to convert you to a standard account, or you might have to open up a new one and then you can then switch everything over from your 123
Does using the Santander App qualify as using online banking for lite account every 3months?
Yep, you can use the app or log in online
If I move to 123 lite can I still use my existing 123 credit card which gives Cashback at Supermarkets etc.?
Hi Alistair. Yes I’d expect so but it’s worth checking with Santander. However, if I’m right there’s a £3 monthly fee on the card, and the caps mean you can get a max of £9 across the three categories – and that’s if you are spending £150 a month at department stores. Let’s assume you are getting all that – so spending £550 to get £6. You’d probably be better off using an Amex Platinum Credit card. Spend £550 and you’ll get £5.50, but you’re not capped, and will earn on other categories too.
If I change from the 123 to the lite account will I still be able to use my debit card for atm euro withdrawals in Spain and pay no interest or charges and get bank rate as I do now
Hi Helen, yes Santander offer this for Spain on all adult bank accounts.
“If you currently have a 123 account then it’s fine to downgrade your account to a 123 Lite. You will need to phone up the bank or go in branch to do this.”
No need to phone the bank or go in branch at all. You can downgrade online. I did it almost a week ago.
On the Santander website go to “Apply for a 123 Lite Current Account” and it will give you 2 options – 1 to “Start new application” and 2 to “Transfer a Santander account”. Select that second option and enter a few details on the form – it’s really quick to do!
Alternatively, if you’re logged in to your online banking, then select the option on the right to “Upgrade current account”, then select “Find out more” under the 123 Lite details, then select “Upgrade” (I know technically it’s a downgrade, but that’s what they call it!) and it will take you to the same form as the above other method does. Just enter a few details and done.
Account switches from 123 to 123 Lite and all your other details (account number, card and pin) stay the same 🙂
Thanks Gill. Really useful
I agree with Gill. Just transferred to Lite automatically and saving £4 a month!
may be stupid question but do you get the £130 or £160 (not sure at time of writing) to switch from 123 to 123 lite, as advertised august 2022
I think Santander is still one of the best options when choosing a current account, especially the Lite account.
If you’re a 123 customer, downgrading is easy. I applied yesterday and I was switched earlier today so it was very quick. All the bank details and card stay the same.
I have been with Santander since 2016 (123 account). I was going to switch to another bank when they announced the cut in interests but I decided to just downgrade to the 123 Lite instead. I’m not going to get the interests BUT I’ll move my money into a saving account at a same rate or slightly better. This way I’ll get the same interests as the 123 account but without paying the 5 pound fee. And keep receiving the cashback from bills.
That sounds like a great plan Sush
That’s exactly what I intend to do.