Disappointed by the interest paid on your savings account? Why not lend money to your energy supplier instead? There are several energy companies that will pay you interest for having a credit balance with them.
Ah, energy companies. I’m not sure about you, but I haven’t always had positive experiences with them. If they’re not increasing my prices, they’re sending me a letter to say that my direct debit is increasing anyway. I wouldn’t be bothered so much if they hadn’t lowered it a couple of months before. Then you look at your account, only to see that you are hundreds of pounds in credit!
Usually, this kind of thing would annoy me. Why should a large energy company be making interest off my money? But in fact, you could use it to your advantage. There are several energy companies who will actually pay you interest on any credit balance you may have.
The best rates
Unsurprisingly, it’s the smaller players in the energy market that have taken the initiative with paying interest.
One of the best on offer is OVO.
Overpay into your OVO account and you’ll earn 3% interest on any credit balance. And that’s just in your first year. In your 2nd year that increases to 4% and in the 3rd year, 5%. OVO will pay you interest on balances of up to £1000!
Iresa, who are fairly new to the market, will pay you 4.5% on credit balances spread over 12 months. Although their interest rate starts at a better rate compared to OVO, in March 2018, Iresa was banned from taking on any new customers. Plus, they have some shocking reviews from various places on the internet. *Please note that unsurprisingly, Iresa have ceased trading!*
Tonik, another of the smaller providers, offers 3% on their credit balance. Again, this is limited to £1000.
Scottish Power is the only one of the big 6 to offer money back on a credit balance, but it’s the less generous than the offers listed above.
They offer a scheme called “rewarding our customers”. I prefer to call it “we’ve taken far too much money off you, so have some interest back.”
Taken from their website:
If your account is over £100 in credit, Scottish Power will return some money to you.
This isn’t quite as simple as the other schemes, and at most, you will earn 2.4%
This is a scheme I have actually used. It wasn’t all straightforward though, as the agent from Scottish Power I spoke to initially didn’t really know anything about the scheme. After around 10 minutes, she came back to me and said that I didn’t qualify but didn’t really explain why. I took the case to a supervisor and they paid out fairly quickly.
Are these accounts worth it?
That depends. If you can save over £50 by swapping to a different energy provider, then do. But if the likes of OVO are offering you a competitive tariff, it’s certainly worth considering setting a higher direct debit with them. That is if you have the money to spare in the first place.
Energy savings don’t stop there
Interest on your credit balance isn’t the only way to make money from your energy company. There are a couple of bank accounts that pay cashback when your direct debit leaves your account.
The Santander 123 account and Natwest’s award account pay 2% cashback on your energy bills. They offer cashback on all sorts of bills, but the accounts do come with a fee.
Or take a look at this great deal from Octopus Energy which earns you £50 just for joining.