The best reward current accounts

Is it worth getting an extra from your bank each month, and if so, which bank gives the best reward?

There are a number of reasons to switch your bank, with the “reward” account an increasingly common way the banks are trying to tempt you to bank with them.

From free cinema tickets to a fiver paid to your account each month, they’re certainly better than the accounts we’re all used to which give nothing in return.

But they aren’t without some drawbacks, including fees and requirements that you set up direct debits or deposit money each month.

And there have been quite a few revamps this year designed to dissuade those who only have the accounts for the rewards, rather than their regular spending and saving.

But whether you’re just after one account or are happy to game the system for a handful, they are worth considering.

Rather watch rather than read? Here’s my video review of reward current accounts

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What is a reward bank account?

Here’s how reward accounts work:

You can earn monthly cash or freebies

Some accounts offer cash, some offer a freebies and others give you the choice between cash and freebies.

Reward accounts come with a fee

These benefits aren’t actually free! All the accounts charge a monthly fee. Some you can avoid by paying in a certain amount of money each month. Others you’ll need to take into account when working out how much you’ll make.

You might have to “claim” the reward

Though some will pay the reward into your account, others (Natwest & Barclays) put the money in a separate rewards wallet which you have to manually withdraw. It’s a bit pointless really.

And if you’re claiming a non-cash reward then you will have to select it, though you shouldn’t have to do anything else each month.

There will be additional requirements

Some reward account require you to either set up direct debits or pay in a minimum amount each month.

Here are the typical ones. You’re unlikely to be required to do all of them, probably just one or two.

Set up direct debits

Often banks require one or two direct debits, sometimes with a minimum value. Though ‘active’ usually means the money has to have been paid in the last year, the banks that use this only pay you the months a direct debit is paid.

It’s not such a huge issue as if you pay bills you’ve all got direct debits you could use – though they might be better suited to a cashback current account.

If that’s the case direct debits can easily be set up for other things too, such as credit card bills, memberships, subscriptions and charity donations.

You can change direct debits to a different bank with whoever you pay, or do a partial switch with your bank.

Pay money in each month

Reward accounts often require a minimum deposit each month. This is to encourage you to pay your salary there. You can do that easily if you want – just tell your HR department of the new details.

But you don’t have to. It’s easy to transfer money in from a different current account via a standing order. You can do this as one limp sum or break it into smaller amounts over the month if that’s better for you.

And it doesn’t have to stay there either. You can transfer it back out straight away.

Spend on your debit card

A couple of accounts require you to spend on the debit card too. If you can do this as part of your regular spending then great, but obviously be careful if not.

Use your internet banking or the app

You might also need to log in to your banking app or online account once a month to qualify for the reward.

Having multiple reward accounts

As I’ve said many times, there’s no reason why you only have to have one current account – and that means you can have multiple reward accounts too.

You’ll only be allowed one personal reward account with each bank, though you can have an extra one as a joint account with some of the banks. That means you could potentially have three accounts in a household, and three times the rewards.

But the more you have, the more you have to do to be eligible. Some are easy to overcome, others might make it less worthwhile.

Recirculating your inbound payments

As explained above, most people should be able to cover this for one reward current account. And if you have more than one then it’s easy to repeat for the others.

I actually move the money from bank to bank to hit the eligibility threshold, with it eventually coming full circle back to my original account.

Checking the apps

This is a bit of faff, but managable. Make sure you remember to do this if it’s not your main account. I’ve got a recurring entry in my calendar to check all the apps – which also acts as a handy reminder to claim or transfer out the rewards.

Running out of direct debits

If you have multiple reward accounts then you might quickly run out of direct debits. It used to be you could set up a couple of £1 ones for charities, but the banks have cottoned on to this and made it pretty pointless.

For example, Natwest give you £2 back for each direct debit, but the DD needs to be at least £2. So if you’re setting up a new payment just to get the reward, you won’t actually be any better off.

Of course you could see it as free cash for charity – which is great – but it does require a bit of effort.

My top reward bank accounts

Here’s my opinion on the different reward accounts.

Club Lloyds account

  • What you get: Six Free cinema tickets, a monthly movie rental, magazine subscription OR a dining membership
  • Monthly fee: £3, though refunded if you pay in £1,500 a month
  • What you’ll really get each year: £54 (equivalent value of 12 Rakuten movie rentals)
  • Requirements: None

The Club Lloyd account is my top pick as it’s the easiest one to get. There’s no reason why you can’t just open this up (ideally via a switching bonus), set up a standing order to pay the £1,500 in (and out) each month, and keep claiming your reward.

You can have one personal and one joint account and claim the rewards on both.

Here’s my full review of the account, where I break down which freebie “Lifestyle Benefit” I feel gives the best value.

Halifax Rewards account

  • What you get: £5 a month, one cinema ticket a month, 2 movie rentals a month, OR 3 digital magazines a month subscription
  • Monthly fee: £3, though refunded if you pay in £1,500 a month
  • What you’ll really get each year: £60 (if you go for the cash option)
  • Requirements: £500 spend on your debit card or £5,000 held in the account

You get more from the Halifax Rewards account so it was a close call between the two accounts for my top spot – you just need to jump through an extra hoop to get this one.

To get your choice of reward (more on how the account works and what you can get in my review here) you need to spend £500 a month on your debit card.

To start I wasn’t a fan of this as it meant missing out on cashback from my American Express credit card. But I’ve since found out a workaround where you can pay off your credit card with your Halifax debit card. Or you can use the debit card to pay money into an NS&I saving account.

So with this in mind it should be an easy reward to claim and well worth having it alongside the Club Lloyds account.

Again, you can have two accounts in your name and still get the rewards, though one must be a joint account.

Other reward accounts

For completion, here are the other main reward current accounts. It might be worth looking at these if you already bank with them, or if there’s a switching offer on top.

Natwest Reward account

  • What you get: £5 a month reward
  • Monthly fee: £2
  • What you’ll really get each year: £36
  • Requirements: Two direct debits of at least £2 each and log into your account once a month

This account used to be a favourite of mine, but since its revamp at the start of the year it’s not really worth it unless you have direct debits to spare.

The Rewards account is one where you have to log in to a separate “MyRewards” account to claim your bonus. You can send it as cash to your account, donate it to charity, or top it up as an e-gift card payment.

However if you do have one, then it does offer some decent cashback with partners in the MyRewards account so do check it out. This year for example I’ve saved 75% at Beer52, 25% at Now TV and a few more.

Here’s more on how the account works. It’s the same for the Reward account offered by RBS.

Barclays Blue Rewards

  • What you get: £7 a month reward
  • Monthly fee: £4
  • What you’ll really get each year: £36
  • Requirements: Two direct debits (You’ll get a £3.50 reward for each one)

If you have a Barclays account with direct debits you absolutely should claim it. But I don’t think it’s worth moving to the bank for.

There is usually an increased reward offer for new customers once a year or so where you get double rewards (so £14 a month) for 12 months.

There are also extra payments if you have life insurance or a loan with Barclays. Here’s my review.

Co-op Everyday Rewards

  • What you get: up to £5 a month reward
  • Monthly fee: £0
  • What you’ll really get each year: Up to £60
  • Requirements: Four direct debits, £800 a month deposit, log into mobile banking once a month, spend with the debit card

This rewards feature can be added to most Co-op current accounts. However it requires a lot more effort to get the money.

You’ll get £2 for each month you quality, so there’s a minimum of £24 a year from that. But the four direct debits will be more than that so it’s only really for those with surplus direct debits.

The extra £3 a month comes from use of the debit card. It’s 5p each time you use it. So use it 10 times a month and you’ll earn 50p, and use it 60 times you’ll get £3 (the limit on this part).

TSB Spend and Save Account

  • What you get: £5 cashback for the first six months
  • Monthly fee: £0
  • What you’ll really get each year: £30
  • Requirements: Make 30 payments a month

I’m not a fan of this account either as you’ve got to make 30 debit card payments each month to get a fiver. And the reward only lasts for the first six months. Once for completists only. You can however get an extra £50 cashback from Quidco for switching.

Should you get a reward current account?

Existing bank customers

If you already have an account at a bank which offers a reward then it’s well worth adding on the feature or upgrading your account to get the bonus. The Barclays Blue Rewards account for example is an add-on to existing accounts.

But you do need to make sure you’re not going to suddenly start paying monthly fees, so check that you can meet the requirements to avoid this.

New customers

Most of the banks that offer rewards also offer switching bonuses. And since they’re often worth at least £100, these bonuses give a larger and more immediate return than the monthly rewards.

So could it be worth waiting to open a new reward account until there’s a switching bonus on top? Well, these always come and go, so there could be an element of waiting for one of these promotions.

However, Lloyds, RBS and Natwest have all allowed existing customers to switch in and get the bonus. I can’t guarantee that’ll always be the case but if you want to nab one of these accounts when there is no bonus there’s a good chance you can get it later.

Halifax’s recent switching bonus was only for people opening a new Reward account, so it makes sense to hold fire there and wait to see if the offer returns.

If a bank is offering a bonus, then you’ll be able to get more details in my regularly updated bank account offers article here.

Alternatives to reward accounts

Of course, there could be a better bank out there which should be your priority. Things like overdraft fees or savings account rates might be more important to you. New banks like Starling and Monzo have great features to help you budget, or perhaps you want to make sure you have access to a branch. And of course it might work out better to go for cash bonuses or cashback on your bills.

You also need to decide how many accounts you’ll be happy to manage. I have each of these reward accounts, but none of them are my main account. I simply move money in and out to take advantage of the freebies.

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