Moneyzine
/Banking Guides/Reward Bank Accounts

Best Reward Bank Accounts in 2024

Rewards make banking fun. Find out the best accounts you can save & earn with while shopping.
Hristina Nikolovska
Author: 
Hristina Nikolovska
Idil Woodall
Editor: 
Idil Woodall
Muze Hasan
Fact checker: 
Muze Hasan
19 mins
March 5th, 2024
Advertising Disclosure

Reward bank accounts offer perks in return for your spending. These perks range from cashback offers to discounts at select retailers. Typically, they charge a modest monthly fee and may impose minimum pay-in requirements.

For those who can satisfy the eligibility criteria, these accounts may present good value. We gathered a list of the best offers in the market currently and discussed their advantages and disadvantages.

Best Reward Bank Accounts – Our 2024 Recommendation

Top 10 Reward Bank Accounts Reviewed and Compared

Here are the ten best reward bank accounts in the UK that you should consider opening if you are looking for cashback, discounts, and other valuable benefits.

Best Reward Bank Accounts at a Glance
  • Best overall – Club Lloyds Account

  • Best for maximum cashback – Santander Edge Current Account

  • Best Digital Bank Alternative – Revolut Standard

  • Best switching bonus offer – NatWest Reward Bank Account

  • Best low-cost option – Chase Current Account

  • Best alternative for earning interest – Virgin Money M Plus Account

  • Best switch bonus alternative – TSB Spend & Save Account

  • Best for overdraft – First Direct 1st Account

  • Best ongoing rewards alternative – The Co-op Bank Current Account

  • Best all-around alternative – Halifax Reward Current Account

1. Club Lloyds Account – Best Overall

Switching Cash Bonus

No

Cashback

Up to 15% (with selected retailers)

Interest on Funds in Current

1.5% AER on balances up to £3,999;3% AER on balances between £4,000 and £5,000;No interest on balances over £5,000

Other Perks

Lifestyle benefits (Disney+ subscription, cinema tickets, magazine subscription, coffee, and dining offers)

Monthly Fee

£3 (Waived if £2,000 is deposited each month)

Lloyds Bank currently doesn’t offer any incentives for switching banks, but ultimately, it doesn’t need one to be the best. The Club Lloyds account is our overall top pick for best rewards bank accounts as it’s simply stacked with benefits.

Attractive cashback and annual rewards offers, interest on balances up to £5,000, and access to multiple savings accounts with considerable interest rates – what more can you ask for?

It’s the overall best option for both earning interest and ongoing rewards. While it has no considerable drawbacks, we can point out that there are alternatives charging no monthly fees, though they don’t provide the same advantages as the Lloyds Club account.

Pros
  • Access to high-interest savings accounts
  • Interest paid on balances up to £5,000
  • Plenty of extra perks and rewards
Cons
  • No switch bonus cash offer
  • Monthly fee
  • Deposit requirements to avoid the monthly fee are too demanding
Lloyds Bank7.5Visitwww.lloydsbank.com/

2. Santander Edge Current Account – Best for Maximum Cashback

Switching Cash Bonus

No

Cashback

1% (up to £10 on bills and another £10 on supermarkets and travel)

Interest on Savings

7% AER for balances up to £4,000 (of which 2.5% AER is for the first 12 months only)

Monthly Reward Qualification Criteria

At least two active direct debits

Minimum Monthly Deposit

£500

Monthly Fee

£3

Santander’s Edge current account has no active switching cash bonus offers at the moment of writing, but the bank is known for offers like this.

Despite that, its cashback reward program is quite unique. It separates expenditures into bills and other essentials and pays 1% on transactions. With a maximum monthly limit of £10 for each category, it has the highest maximum cashback potential of all the accounts we reviewed.

Santander Edge’s 7% interest AER on savings is also noteworthy, though after the initial 12 months after joining, it drops by 2.5%.

Pros
  • Excellent savings interest rates
  • High maximum cashback limit
  • Arranged overdraft
  • Traveling benefits
Cons
  • No cash reward for switching
  • Requires paying a monthly fee
  • Direct debit requirements
  • Interest charged on overdraft
Santander7.5Visitsantander.co.uk

3. Revolut Standard – Best Digital Bank Alternative

Switching Cash Bonus

No

Interest on Savings

Up to 2.29% AER

Cashback

Up to 3% on accommodations0.4% on Pro card payments

Other Perks

Various dining and shopping discounts and cashback offers

Minimum Monthly Deposit

No

Monthly Fee

None

Revolut is one of the most popular fintech solutions with banking capabilities.

This means that Revolut can give you access to cashback, discounts, interest rates on savings, and other banking services that other digital-only banks can’t. Granted, most of the good stuff is hidden behind a paywall, particularly with the most expensive plans Metal and Ultra.

However, the Standard plan has something to offer for free as well, most notably, it works excellently as a budgeting app and is an excellent travel companion, offering multicurrency accounts including a euro and US dollar account. Consider checking it if you want to move away from high-street banks and operate fully digitally.

Pros
  • Traveling benefits
  • Interesting cashback and discount offers
  • No monthly fee
  • No deposit requirements
Cons
  • No switching bonus cash reward
  • No overdrafts
  • Plans with better rewards are too expensive
  • Doesn’t accept cash or cheque deposits
Revolut8.5Visitrevolut.com

4. NatWest Reward Bank Account – Best Switching Bonus Offer

Switching Cash Bonus

£200

NatWest Rewards (cashback)

1% up to (£1 on debit card payments with selected retailers)

Direct Debit Rewards

£4 (minimum of two direct debits)

Maximum Rewards per Month

£5

Minimum Monthly Deposit

£1,250

Monthly Fee

£2

NatWest’s Reward Bank Account is tied with TSB’s Spend & Save Account for the best switching bonus offer, as both banks currently give new users £200 to join.

However, in addition to the cash reward, NatWest also provides a permanent £4 reward for keeping two direct debits active on the account, and it slightly edges TSB’s offer. It also offers cashback of up to £1, which adds up to a maximum of £5 in rewards per month.

But when we consider the £2 monthly fee, only £3 of free money is actually available. Additionally, we consider the £1,250 minimum monthly deposit requirements excessively high, particularly when the account doesn’t provide any interest.

Pros
  • Attractive switch bonus offer
  • Attainable reward qualification requirements
  • Permanent cashback program
  • Arranged overdraft
Cons
  • Demanding monthly deposit requirements
  • Doesn’t pay interest
  • Requires paying a monthly fee
  • Interest charged on overdraft
NatWest6.5Visitwww.natwest.com/

5. Chase Current Account – Best Low-Cost Option

Switching Cash Bonus

No

Cashback

1% (up to £15 per month, applies on most purchases)

Interest on Funds in Current

1% AER

Interest on Savings

Access to Chase Saver Account:4.1% AER (Easy Access Savings)

Minimum Monthly Deposit

No

Monthly Fee

None

The Chase current account has no monthly fees and minimum deposit requirements and allows users to earn cashback and interest rates on both their funds in balance and their savings.

It’s important to note that the cashback offer is promotional and only available for the first 12 months upon joining. After that, you need to deposit at least £500 to keep your cashback offers, which isn’t that bad.

Pros
  • No qualifying criteria for rewards
  • High cashback maximum limit
  • Interest applied on money in-balance
  • No monthly fees
Cons
  • No switching cash bonus offer
  • Digital app-only bank
  • Limited variety of account types
  • No overdraft available
Chase8.0Visitwww.chase.co.uk/

6. Virgin Money M Plus Account – Best Alternative for Earning Interest

Switching Cash Bonus

No

Cashback

Up to 15% (with selected retailers)

Interest on Account Balance

2.02% AER on balances up to £1,000

Interest on Savings

Access to M Plus Saver:3.55% AER on balances up to £25,0002.52% AER on balances over £25,000

Minimum Monthly Deposit

No

Monthly Fee

None

Virgin Money’s M Plus account has a seriously great interest-earning offer, and it would’ve been the best pick for interest if not for Lloyds Club. It pays interest on balances and savings amounts over £25,000, which is a rare found.

Its cashback offer is not the best, but the account comes with no monthly fees or minimum deposit requirements. Additionally, it’s one of the few options to facilitate unarranged overdrafts.

Pros
  • Interest paid on funds in current account balance
  • Access to exclusive savings account
  • No monthly fee
  • Arranged and unarranged overdrafts
Cons
  • No switching cash bonus offer
  • Only temporary promotional cashback offers are available
  • Interest charged on overdraft
  • Lacks convenient features like roundups, option to free card, etc
Virgin Money8.0Visituk.virginmoney.com

7. TSB Spend & Save Account – Best Switch Bonus Alternative

Switching Cash Bonus

£200

Switch Bonus Qualification Criteria

At least two active direct debits

Interest on Savings

2.77% AER

Maximum Monthly Cashback

£5 for the first six months (20 debit card payments to qualify)

Minimum Monthly Deposit

£500

Monthly Fee

None

Undoubtedly, the best thing about TSB’s Spend & Save account is the £200 cash bonus for switching. The reward is available for all new users who will activate two direct debits and deposit £500 into their accounts, which we don’t see as unreasonable.

Other than that, the bank provides a temporary cashback program, which will reward £5 to all users who will use their TBS card to make 20 monthly payments, which seems a bit excessive.

TSB also provides interest on savings, though at a low rate, but on the plus side, it doesn’t charge a monthly fee for keeping the account open.

Pros
  • Great cash bonus offer for switching
  • Cashback fixed at £5
  • Arranged overdraft
  • No monthly fee
Cons
  • Low interest rate on savings
  • Cashback offer is temporary
  • Interest charged on overdrafts
  • Minimum monthly deposit requirements
TSB6.5Visitwww.tsb.co.uk/

8. First Direct 1st Account – Best for Overdraft

Switching Cash Bonus

£175

Interest on Savings

Access to Regular Saver Account:7% AER (requires a monthly deposit of between £25 and £300)

Cashback Rewards

No

Other Perks

0% overdraft for up to £250

Minimum Monthly Deposit

£1,000 (over three months)

Monthly Fee

None

If prioritise overdrafts on your reward bank account, First Direct’s 1st account is the obvious choice. It’s the only account in our selection that offers a 0% interest overdraft, albeit with a low limit of up to £250.

Sadly it offers no cashback but provides access to a regular saver account, which earns an impressive 7% AER for depositing amounts between £25 and £300 every month. Not bad for an account with no monthly fees.

Pros
  • Switching cash bonus reward
  • Access to a regular savings account with attractive interest rates
  • No charges for overdrafts up to £250
  • No monthly fees
Cons
  • Demanding minimum deposit requirements
  • Cashback only available on promos
  • Limited variety of account types
  • No interest paid on funds in current account balance
first direct7.0Visitwww.firstdirect.com/

9. The Co-op Bank Current Account – Best Ongoing Rewards Alternative

Switching Cash Bonus

£125 (through a referral program, where both the referrer and referee get £125 each)

Switch Bonus Qualification Criteria

£800 deposit;Minimum of two active direct debits;Minimum of five card payments

Everyday Rewards Scheme

£1 per month (if qualified)

Everyday Rewards Bonus

Up to £1.20 (2p for each debit card payment)

Everyday Rewards Qualification Criteria

£800 deposit per month;Keep balance above £0;Minimum of four active direct debits

Monthly Fee

None

The Co-operative bank has a very unique take on rewards bank accounts. Its switching bonus cash reward works as a referral program, in which both the new user and the user that referred them each get £125.

Furthermore, its Everyday Rewards program can guarantee you £2.20 every month, permanently, as long as you can meet the qualification criteria. The bank doesn’t charge a monthly fee, so these £2.20 are yours to keep.

If not for Lloyds Bank, the Co-op’s rewards scheme is a serious contender for the best rewards bank account.

Pros
  • Appealing referral switch bonus offer
  • Permanent rewards program
  • No monthly fee
  • Arranged overdraft
Cons
  • Demanding minimum deposit requirements
  • Demanding rewards qualification criteria
  • Interest charged on overdraft
  • No interest on funds in balance

10. Halifax Reward Current Account – Best All-Around Alternative

Switching Cash Bonus

£150

Cashback

Up to £25 per month (for three months)

Interest on Savings

4.2% AER for up to three withdrawals;1.05% AER for more than three withdrawals

Other Perks

Monthly Rewards (£5 bonus, cinema ticket, digital magazines); Up to 15% cashback with selected retailers

Monthly Reward Qualification Criteria

Spend £500 on debit card per month or keep at least £5,000 balance;Deposit at least £1,500 into account;Keep balance above £0

Monthly Fee

£3 (Waived if £1,500 is deposited each month)

The Halifax reward current account is an interesting case. It does many things well but doesn’t excel in any of them. It offers a £150 switching cash bonus, which is great, but better offers are available. It offers an amazing cashback program that can earn you up to £25 per month, but only temporarily.

Monthly rewards, interest on savings – there are plenty of other noteworthy advantages to using the Halifax reward current account. If you’re unhappy with the other picks in our selection, it’s definitely worth considering.

Pros
  • Cash bonus for switching
  • Attractive cashback offerings
  • Additional perks and rewards
  • Arranged overdraft
Cons
  • Demanding reward qualification criteria
  • Requires paying a monthly fee
  • High deposit requirements to avoid the monthly fee
  • Interest charged on overdrafts
Halifax6.0Visitwww.halifax.co.uk/

How We Rate & Review The Best Reward Bank Accounts

To determine which reward bank accounts are good and which ones are excellent, we place the options currently available on the market through a comprehensive evaluation process. All the accounts in our top ten selection are carefully assessed based on several critical factors, ensuring a thorough analysis that guides our readers' decisions.

The five pivotal criteria we consider are:

  • Switching cash bonus offers – Many banks entice new customers with attractive cash bonuses, which can amount to several hundred pounds. We dissect the qualifying requirements associated with these offers, enabling readers to assess their eligibility and potential gains.

  • Cashback offers – Cashback perks in reward bank accounts provide users with valuable returns on their spending. We carefully analyse how these cashback systems function, their percentages and maximum limits, and gauge the significance of their financial benefits.

  • Interest rate – The interest rate component can significantly improve the overall value of a reward bank account. Just like cashback offers, they’re vital to our evaluation process. We analyze the percentages and maximum limits and compare them to the costs.

  • Monthly fee – To assess the affordability and cost-effectiveness of reward bank accounts, we delve into the monthly fees charged by banks. By comparing these fees to potential earnings from rewards, readers gain insights into whether the account is an option worth considering.

  • Reward qualifying requirements – To unlock the promised rewards, users often need to fulfil specific criteria such as minimum deposits or direct debit activation. We scrutinise these requirements to help readers understand the accessibility and feasibility of the rewards.

Additionally, we consider the presence of supplementary perks and rewards beyond cashback and interest. Exceptional rewards receive due recognition in our ratings, while trivial perks are duly noted, ensuring our readers receive a holistic overview of each bank account's value proposition.

What Is a Reward Account?

A reward bank account is a term often used in banking that refers to a type of bank account designed to offer users extra financial benefits beyond standard services. In today's competitive landscape, most banks provide these accounts to attract potential customers and outshine their rivals.

Within a reward bank account, users can anticipate an array of advantages, including cashback, interest rates, and other enticing incentives that may bring additional monetary value.

In some cases, reward bank accounts may come with extra costs, compared to standard current accounts. Additionally, some banks set qualifying criteria like depositing a specific amount of money, activating direct debits, or making a certain number of payments for the user to earn their reward.

For this reason, users must carefully assess their options when selecting a reward bank account for themselves.

What Incentives Do Reward Accounts Offer?

Every bank strives to offer similar benefits but with a unique twist. They seek to creatively blend financial advantages with strategies encouraging users to their services more.

Most commonly, you can find the following incentives in reward bank accounts:

Switch Bonus

Similar to a welcome bonus, some banks provide a switch bonus that can be considered free money as a reward for opening a new bank account.

Monthly Flat Maximum Cashback

With this incentive, users receive a predetermined monthly cashback amount on their payments. The cashback is capped at a specific value, providing a consistent benefit.

Monthly Maximum Cashback %

The percentage-based cashback allows users to earn back a portion of their spending on eligible payments. This cashback is also subject to a maximum limit each month.

In-Credit Interest Rates

Reward accounts may provide users with interest on their account balances and savings, allowing for their money to grow.

Discounts at Selected Retailers

Reward bank accounts often extend exclusive discounts at specific retailers, enabling users to access products and services at reduced prices.

Various Non-Monetary Rewards

Streaming services subscriptions, cinema tickets, digital magazine subscriptions, memberships, and other similar gifts and prizes.

Are current account rewards taxable?

Depending on the reward and the specific reward bank account, current account rewards can indeed be subject to taxation. However, many banks strive to structure these rewards in a manner that appears non-taxable.

For instance, some banks label their cashback rewards as discounts, effectively circumventing potential tax obligations.

It depends on a case-by-case basis, and the best way to ensure that you're accurately addressing the tax implications of current account rewards is to consult with a representative from the bank in question.

What Makes a Good Reward Account?

A good reward account is characterised by its ability to offer substantial financial benefits while aligning with the user's individual preferences and financial habits and providing extra value. While a certain account may seem to be providing great value for a small monthly fee, the qualifying criteria must be a part of the equation.

Some of the most common conditions required to earn the rewards imposed by banks include:

Minimum Monthly Pay-in

The minimum monthly pay-in refers to the amount of money users must deposit into the account each month to access the offered rewards. A good reward account has a reasonable minimum pay-in threshold that accommodates various income levels while ensuring users can fully enjoy the benefits on offer.

Notably, certain banks stand out by omitting this requirement altogether, but most banks in the UK set £500, £800, £1,000, or even higher minimums for their rewards accounts.

Direct Debits

The inclusion of direct debit requirements can significantly impact the overall value of a reward account. A favourable account strikes a balance by mandating a manageable number of direct debits, enabling users to meet the conditions without undue effort.

This is a condition imposed by almost every bank on the market. Interestingly, all the banks we reviewed had a minimum of two active direct debit requirements.

Other Services

Some other conditions that banks may impose on their users to qualify for their rewards include using CASS to transfer their accounts, frequent logins to their online banking systems, completing a specific number of transactions within a certain timeframe, etc.

In most cases, these are easily achievable requirements, though they successfully encourage user engagement and promote active account utilization.

What about overdraft and interest rates?

Interest and overdraft rates in reward accounts may diverge from standard accounts due to the unique benefits these accounts offer.

With perks like cashback and discounts, reward accounts might have slightly lower interest rates on balances to offset the cost of rewards. Conversely, overdraft rates in reward accounts could be marginally higher to manage the financial aspects of providing rewards.

These variations ensure the bank remains profitable while offering additional benefits.

The Best Current Account Switch Offers

NatWest Reward Bank Account

£200

TSB Spend & Save Account

£200

First Direct 1st Account

£175

Best Current Accounts for Interest

Club Lloyds Account

Up to 3% AER on balance, up to 6.25% AER on savings

Chase Current Account

1% AER on balance, 4.1% AER on savings

Virgin Money M Plus

2.02% on balance, up to 3.55% AER on savings

Best Accounts for Ongoing Rewards

Club Lloyds Account

Lifestyle Benefits

The Co-op Bank Current Account

Everyday Reward Scheme

NatWest Reward Bank Account

Up to £5 cashback every month

Best Current Accounts for Maximum Cashback

Santander Edge Current Account

Up to £20 per month

Chase Current Account

Up to £15 per month

Halifax Reward Current Account

Up to £25 per month (for three months)

How to maximise cashback?

Here are a few extra pro tips that can help you maximise earnings from a cashback current account:

  • Prioritise using your reward account for transactions in categories with the highest cashback percentages.

  • Keep an eye out for special promotions or limited-time offers that provide enhanced cashback rates for certain periods or merchants.

  • Make use of linked cards and partner retailers to earn extra cashback on your purchases.

How to Switch Accounts

Switching accounts using the CASS may seem intimidating, but it’s actually a pretty straightforward process. Here is a helpful three-step guide that can help you do it:

Prepare for your switch

Verify that you're eligible for the Current Account Switch Service and ensure your old bank participates in the service. Research and choose a new bank and account that aligns with your needs and also participates. Finally, compile a list of your existing direct debits, standing orders, and recurring payments to ensure nothing is missed during the transition.

Which banks are included in CASS?

Initiate the switch

Collect necessary documentation such as identification, proof of address, and account details for both your old and new bank. Coordinate with the new bank to select a convenient switch date. This will be when your old account services are transferred to the new account. Contact the new bank to initiate the switching process.

Complete the switch and ensure your rights

Keep an eye on your old and new accounts to ensure a smooth transition. Familiarize yourself with the Consumer Switch Guarantee, which will help ensure that the participating banks promptly address and rectify any issues during the switch. Once the switch is completed, your old account will close, and your new account will be fully operational.

Compare the Best Reward Accounts

Here are a few tips that can help you compare and choose the best reward account for your personal circumstances:

Decide what features matter most to you

Assess your financial habits and preferences to determine which rewards and benefits align best with your lifestyle. Consider whether cashback, interest rates, or other perks hold more significance for you.

Compare deals

Thoroughly evaluate the deals offered by different banks. Look into the cashback percentages, interest rates, and other rewards provided by each account. This comparison will highlight which accounts offer the most favorable terms.

Check the requirements

Scrutinize the eligibility criteria and requirements associated with each reward account. Ensure you can meet the criteria, such as minimum pay-ins or direct debit activations, to access the rewards. This step will prevent any surprises down the line.

Check if any fees are worth it

Analyze any associated fees, including monthly charges, overdraftfees, or transaction fees. Assess whether these fees are reasonable compared to the benefits you'll receive. Sometimes, the rewards may outweigh the costs, making the account still worth considering.

FAQ

What is a reward bank account?
How do bank rewards work?
Are reward bank accounts worth it?
How often can you switch bank accounts for rewards?
Do reward accounts offer insurance?

Related Content

  • Best Business Credit Cards for Startups in the UK for November 2024
    Credit helps UK startups manage their costs and scale. Business credit cards can be a great option if you own a promising startup. Your startup can access low-interest-rate business credit cards even without a credit history.
    March 20th, 2024
  • Best Business Credit Cards in the UK for November 2024
    A business credit card could help your business with a variety of goals. Whether you want to borrow flexibly, issue employee cards, track expenses, or earn rewards—a business credit card could be just what you need.
    March 14th, 2024
  • Best Dollar Account for UK Residents
    There are many reasons you could benefit from having a USD account. Do you have family in the US? Or spend a lot of time there? Or do business with American people or organisations?
    February 20th, 2024
  • Best Multi-Currency Accounts UK: Top Personal & Business Accounts for 2024
    Ever found yourself out of pocket because of high currency conversion fees or volatile exchange rates? If this happens to you, then you could benefit from a UK multi-currency account.
    February 8th, 2024
  • Wise and Revolut have come to be dominant forces in the money transfer space thanks to slick apps and lower fees than high street banks. Now, Zing is aiming to challenge that dominance. It combines the smooth mobile experience and fee structure of a fintech with the experience and expertise of the HSBC Group.
    March 14th, 2024

Contributors

Hristina Nikolovska
Hristina Nikolovska, a graduate of the University of Lodz, is a skilled finance writer for Moneyzine. With a knack for simplifying intricate financial topics, her articles provide readers with clear and actionable insights
Idil Woodall
Idil is a writer with interests ranging from arts and politics to history and finance. She spent several years in publishing before becoming a full-time writer, and learning the inner workings of an industry she loved ignited her interest in economics. As an English graduate, she cultivated valuable research and storytelling abilities that she now applies to make complex matters accessible and understandable to many. When she’s not writing, she can be found climbing or watching a movie.
Muze Hasan
Fact Checker
Muze Hasan
Muze Hasan is a technical writer with deep experience writing for the Finance industry for topics including but not limited to stocks, cryptocurrency, mergers, acquisitions, valuation, and insurance. He is also a subject matter expert on Blockchain technology and has designed a plethora of web 3.0 whitepapers and pitch decks. On weekends, you can find him riding his Harley Davidson on the Himalayan mountain range.