A new fee and new rewards make this account a very different proposition. Should you ditch it?
When the bank switching service first came into play back in 2013 I moved over from my ancient Barclays account to the Halifax Reward account.
Not only did I get a nice £100 bonus I also got £5 a month, every single month. That dropped to £3 a month, then £2 a month. I’ve kept it just because it was earning a little bit of cash every year – but it’s not one I’ve recommended for a while now.
Well, in June it changed again. Here’s how the account works, and a trick to make it worthwhile. But first news of a new switching bonus!
What is the Halifax Reward current account?
The Halifax Reward account is a fee-based account that gives you a choice of freebies each month. You can only have one account for yourself, but you can add another as a joint account.
You’re charged a monthly fee – but it can be avoided
The Reward account charges a £3 monthly fee, meaning it’ll cost you £36 a year. This isn’t unusual – many current accounts with benefits have a similar charge, including Barclays Blue Rewards, Natwest Reward and Santander 123.
However you won’t pay the fee if you pay in £1,500 every month. Most people should be ok with this if they pay their salary in – you need to earn just under £21,500 a year to take home this amount after tax and National Insurance.
If not you can pay in smaller amount from another account, eg £500, withdraw it, pay it back in, then repeat it once more.
You chose a reward
To be eligible for one of the ‘Reward Extras’ you’ll need to either spend £500 a month on your debit card or keep £5,000 in the account every day of the month.
You also need to pay in the £1,500 a month every month to get your reward (which you should be doing to avoid the fee), and you need to stay in credit.
If you do this you then get to pick a reward. These are:
- Three digital magazines a month from a selection of Hearst magazine titles (eg Good Housekeeping, Red)
- Two HD digital movie rentals from Rakuten (each valid for 35 days)
- One Vue cinema ticket a month (each valid for 12 months)
- £5 a month
The offer you choose is fixed for a year, so you can’t mix and match throughout the year. You can choose a new reward at the start of each 12 month anniversary.
It’s possible to track the progress towards your reward in the app so you know if you’re going to get it or not each month. You’ll also find when your 12 months is due to end and then choose your new reward (if you want to change it).
Extra cashback offers
You can activate offers from a handful of retailers to earn cashback if spending with your Halifax card. I’ve hardly ever used it, but I check from time to time to see which shops are on there, just in case.
Halifax tends to run a switching deal two or three times a year, usually offering either £100 or £125. The latest offer is for £125 and runs until 9 May 2022. Get details of how it works, and any future promotions, in my Halifax switching offer analysis article.
|Benefits||Choice of £5 a month / Vue cinema ticket / 2 Rakuten HD rentals / 3 digital magazine subscriptions|
|Save the Change auto-savings feature|
|Limited cashback with retailers via debit card|
|Fee||£3 (£0 if you pay in £1,500 every month)|
|Requirements||Pay in £1,500 every calendar month|
|Either spend £500 on your debit card each month or keep £5,000 or above in the account all month|
|Stay in credit (above £0) all month|
|Multiple accounts?||One personal and one joint|
|Exclusions||Your chosen Reward and qualifying method are fixed for 12 months|
Are the rewards any good?
I’ll look at each benefit in turn:
£5 monthly reward
£5 a month profit is better than similar rewards on offer elsewhere – as long as you are avoiding that monthly fee. That adds up to £60 over the year, which although that’s probably a lower value than the other options, you have the freedom to spend it how you wish.
The money is paid into your account each month. It’s worth noting that if you are a higher rate taxpayer you’ll be liable to pay extra tax on this bonus.
Free cinema ticket
The code you’ll get each month is valid for a year, and you can use two or more at the same time – saving on a family trip. They can also be used for pricier 3D screenings or VIP seats too, increasing the value.
Standard Vue cinema ticket prices can vary between a fiver through to well over a tenner, and even more for the posh seats – it all depends on where you live.
If you’re paying close to a fiver, you’re better off getting the cash option – that’ll give you the flexibility to go to different cinemas (or not go at all).
But if you have an expensive Vue cinema near you and go once a month then the value could be pretty decent. Say your tickets are £10 that’s an annual reward worth £120. If VIP tickets are £18 it’s worth £216.
Even so it’s possible to save on cinema tickets in lots of different ways, and those deals could work out as a better option. For example two-for-one tickets via Meerkat Movies or free Vue tickets via a Telegraph trial. Here’s my guide to the best ways to save at the cinema.
Listen to Cash Chats, Andy’s twice-weekly podcast. Episodes every Tuesday and Friday.
Digital movie rentals
The vouchers can be used on SD and HD films on streaming site Rakuten. You can’t use it on titles costing £5.49 or more, which rules out ‘Home Premieres’ and UHD. Having a quick look showed some SH and HD films are priced at £5.49 so it’s unclear if these are excluded.
Assuming an average £5 price, you’ll be getting the equivalent of £10 back from your account. That means it’s got a value of £120 a year.
I think that makes this a decent offer if you regularly watch two new release HD movies a month. However, with more films going straight to streaming services (eg Disney+ or Netflix), you might struggle to find 24 films a year you want to rent – especially if you sometimes go to the cinema too.
It’s worth remembering too that you can also often get free or cheap rentals from time to time in other ways (which I’ll share here). For example, Amazon often runs £1.99 rentals for Prime customers, while Chili has 99p selections.
The vouchers are valid for 35 days, and once you choose your film you’ve 48 hours to watch your film.
You can choose your three titles from this selection:
- Country Living
- ELLE Decoration
- Good Housekeeping
- Harper’s Bazaar
- House Beautiful
- Men’s Health
- Runner’s World
- Women’s Health
Your picks will be digital-only, so you’ll need a tablet or computer to read them. It looks like the three magazines you choose at the start of the year will be the same ones you’ll get all year.
Personally I’d check first what magazines you can get for free from your local library.
Spend or save: Which is best?
So you could be making anything from £60 a year (taking £5 a month) through to £200 (for top end Vue tickets) from this account. But you need to factor in the requirement that you either need to spend or save a lot of money each month with Halifax. Here’s my take on each option.
Have £5,000 in savings
The option of £5,000 a month in your account seems relatively simple. Do this every month for a year and the £60 cash reward is the same return as putting that money in a 1.2% savings account. Even with rate cuts improving most months, that’s actually quite healthy in comparison to others.
But I’m not a fan of this method. For a start that money has to stay there every single day of the month. So whether you need to use it, or the balance accidentally dips after a large purchase, you don’t get the reward.
More importantly, right now you can get 1.5% elsewhere. So you’ll earn a higher rate, be able to earn it on more cash, and have the flexibility to take money out as and when you need it.
Spending £500 via the debit card
The alternative is to spend £500 a month on your debit card. Do this exactly and you’ll earn £60 a year (if you take the cash option). That’s the equivalent of 1% cashback – so no real difference to using the top cashback cards.
However if you spend more than £500 you won’t earn any extra money, reducing your equivalent rate. So do you just spend £500 and stop, then move over to your alternative card?
Well, no as there are a couple of workarounds here that allow you to effectively earn double cashback on that £500 monthly spend.
Very simply, if you have a cashback credit card, you use your Halifax debit card to pay £500 off the bill every month. I’ve done this for the last year now and it works – you’ve just got to remember to do this before your direct debit for your card goes out of your account. I actually moved my Amex payment date from the start of the month to the middle to give me a bit more leeway.
Or, you can add money to a Revolut or Monese current account. These app-only bank accounts both have the option to do this via debit card, so choose this rather than a standard bank transfer.
Once you’ve paid the money you can transfer it out of Monese or Revolut back to Halifax (or any other bank). This is a useful option if you spend with the Chase debit card rather than a cashback credit card.
I actually quite like the Halifax app as you can do pretty much everything on there without needing to log on via a desktop. Some of the key features:
Sharing bank details
You can send your sort code and account number via the app. There’s no option to copy these in the app, so you’ll need to share them to another app (eg notes or messages) and copy there.
All the main options are here:
- View PIN and request new one
- View and copy card details
- Freeze card use abroad, online and / or in-person
- Stop gambling payments
- Set your own contactless limit
You can get notifications for:
- Debit card transactions
- Weekly spending summaries
- Money paid in and out
Sending and adding money
It’s easy to transfer cash to new and existing payees, and there’s no need for a card reader. You can scan a cheque using the app to add the cash to your account.
Insights and budgeting
There’s an easy-to-find option to see all your upcoming payments in one place, how much they add up to and when they’ll be paid. You can also manage and cancel subscriptions in the app – the ones paid via a debit card rather than standing order or Direct Debit.
You can look at monthly trends and payments which is potentially handy, but not as good as those on offer from third-party apps like Money Dashboard and Snoop.
Tapping on a transaction will show on a map where it took place.
There’s a decent seven years of transaction history on the app, which you can also search. It’s possible to export monthly statements from when you opened the account but only as PDFs.
You can also:
- Use Face or Touch ID
- Change personal details
- Add accounts from other banks via Open Banking (just the major high street banks)
- See your credit score from TransUnion (which you can do for free anyway)
However, when compared to the likes of Starling and Monzo, the big absence is the lack of separate pots or spaces. All your money is together in the main account.
Summary: Should you get it?
Though the equivalent 1.2% rate on interest is actually not bad compared to most other accounts, you can still beat it. Plus it’s so restrictive to require £5,000 in the account every day of the month to get the reward.
But thanks to the debit card hack, I think it’s well worth getting one of these accounts to claim the reward alongside your other cashback card.
As to which one you choose… though cinema tickets could work out the best value it does depend on ticket prices so I’d go for – and have – the £5 monthly reward.
Of course if you don’t want too many accounts it might be better to check out other banking offers elsewhere with free cash and other rewards.