27 Apr

Best Cashback Bank Accounts (All You Need to Know!)

We all know that credit cards have offered cash back for so many years, and now debit cards offer the same. But how do debit cashbackwork, and should your switch your current account to a cashback bank account?

One of the primary reasons for using credit cards was the rewards and cash they offered on every expenditure made by the user.

Cashback Bank Accounts

Now, many banks in the United Kingdom offer cashback debit cards and enable you to earn money back rewards on your every expenditure. The more you spend, the more you get.

These welcome rewards were introduced on the basis of some new rules & regulations to switch current accounts into cash in.

Let’s have a glimpse of what actually cashback accounts have for you in the box. Which banks are offering these reward in the UK these days, and is it worth switching account at the moment? Here are your answers:

What is a cashback account?

Cashback accounts are the type of bank accounts that give you money back after each expenditure you make. This is primarily in the form of a percentage of your total expenditure and purchase.

For instance, if you have a current cashback account offering you 1% cashback, it means for every expenditure of £100, you will earn £1.

The best cashback accounts could be an excellent way to make your money stronger for you to spend. A cashback account is usually set up as a current account – just like a part of an everyday bank account you use to spend on your households.

If you have a cashback account in any bank and make a lot of transactions to pay bills, debts, and fees – then on every transaction, you are getting a reward as a cashback.

Hence, cashback accounts make it easy for you to earn little discounts on daily expenses.

On the other hand, if you have a simple current account that doesn’t pay any interest and cashback reward, you may switch it anytime to a cashback bank account to earn more or less £5 every month depending upon your total spend and a number of transactions.

Which banks offer cash back?

Here are the banks that offer cashback rewards with their current accounts:

• Lloyds
• TSB
• NatWest
• Halifax
• Royal Bank of Scotland
• Santander
• Barclays

Which banks give money for opening an account UK in 2021?

There are multiple accounts switching offers and new bank account rewards, but which one is the best for you? Here is the bank list in the UK  that offers you cash back for opening a new account. See all the offers below:

Account switching deals

Close and switch your old account to get the following bonus:

• First Direct – £100 switching bonus
• Halifax – £100 switching bonus plus separate monthly reward
• Virgin Mony – £50 charity donation, 2.02% on £1000, and 12 free bottles of wine
• TSB – £30-£60 cashback for opening an account
• HSBC Advance Current Account – £125 + £20 Uber Eats voucher switcher offer + arranged overdraft of +£1,000

Cashback accounts

• Santander 123 – 0.6% interest and around 3% cashback on bills after fee
• Santander 123 Lite – about 3% cashback on bills after payment

Is bank account cashback taxable?

HMRC has declared that most of the cashback and incentives offered by a bank to its customers are non-taxable. For instance, switching incentives and cashback payments for the bank customer to switch current accounts are not taxable.

Any cashback reward you get when you switch your account is considered an incentive or a discount rather than income or interest.

Therefore, they are not taxable at all. Whereas you would have to pay some tax on monthly current account rewards.