How does being paid by your bank sound? Open the right account and you can receive money back every time you pay certain bills.
Did you know that banks are now paying you to have an account? If you didn’t, then read on.
Loyalty doesn’t seem to count for much nowadays, so having the same bank account for 30+ years doesn’t always benefit you.
This is the amount of money I have been paid by Santander over the last five years after I swapped from Lloyds. I didn’t have to change the way I bank and swapping accounts took me 15 minutes.
How you can be paid by your bank
There are two main accounts that I have looked into that offer a cashback incentive for your household direct debits – Santander 123 and the NatWest Reward account. So every time you pay a household bill by direct debit, you’ll receive cashback.
For the purpose of this comparison I have used the following figures as an example of monthly direct debit costs:
Council Tax £140
Gas and Electricity £80
Broadband and phone £30
Further down, I’ll link to each account so you can work out how much you can receive.So which will earn you more?
Santander 123 Account
Santander cashback breaks down as follows:
You also receive interest on any credit balance. However, Santander recently reduced their interest to 1.5% on this account. Still competitive compared to some others but the £5 monthly fee means that every month you need in excess of £4000 in your account to make it worthwhile. But….
There is an alternative. Santander also offers a 123 Lite account. This offers all the same benefits but you don’t receive any interest. To counter that though the fee reduces to just £1 per month.
This will earn you £5.77 each month or £69.20 a year. Minus the fee, you will be £57.20 better off each year with no effort. Of course, if you have a mortgage and home insurance with Santander you’ll be quids in!
NatWest also has a similar account called the Reward account. They pay 2% (reduced from 3% previously) on all the above bills. So, the same direct debits as above will earn you £7.60 per month (£91.20 yearly). The fee will cost you £2 per month, but you will still be in profit £67.20 a year.
As you can see, the NatWest Reward account will earn you £10 a year more. That isn’t a great difference, so calculate for yourself which account will be better for you. For example, if you pay a lot more on mobile, broadband and TV, Santander may be the better choice as they pay 3% cashback on these bills.
Barclays Blue Rewards
For a £3 monthly fee, you can earn £7 every month and more if you have other financial products with Barclays. Find out more about the Barclays Blue Reward scheme.
I have a Santander account, but that is because I have a mortgage with them. Having one of these accounts is definitely worthwhile, and could see you on your way to making a little extra every month. If you’re not aware of account switching, then take a look at this article.