Are you a spender or a saver? Here’s a few ways interest rate rises can be positive for you!

04/06/2023

Admin

With the base rate seemingly not stabalising anytime soon,  we thought what a great time to look at this positively for those that are savers or spenders, as an increase in the base rate would (eventually) translate to an  increase in interest paid to you on your savings as well as what you can earn back on your spending. 

We have taken a look at some of the top paying credit and debit cards and banks and building societies for you and they are all listed below.

(Please note, this is not financial advice and taking out any form or credit will impact your credit score.)

The Best reward credit cards for spending:

Below is a list of credit cards that provide you either cash back or points that convert into vouchers for shops, airlines, hotels and more. If you’re debt-free and pay off your card every month, you can earn goodies worth £100s each year too.

  • Best Amex credit cards
    • Everyday: 5% back for 3 months, up to 1% after
    • Gold: 20,000 bonus points, £160/yr fee from year 2
  • Best non-Amex reward credit cards, including
    • Sainsbury’s: 8,000 bonus Nectar points, no fee
    • Asda Money: 1% cashback at Asda + £20 ‘cashback’
  • Best reward debit card
    • Chase: 1% cashback, no fee

The bank accounts/current accounts that reward you for spending and saving:

Below is a list of the top ‘paying back’ bank accounts that help with everything from overdraft fees, insurance and paying you when you have money in the bank!  We’ve also included some of the top picks of banks that pay you to switch too!

Top for providing a sign up incentive (up to £200)

NatWest/RBS: FREE £200 + £3/mth cashback

  • Switchers get £200 FREE cash, plus up to £36/year cashback.
  • On top of the upfront switch cash, NatWest Reward and RBS Reward give you £3 every month you use their app and pay out two £2+ direct debits (it’s £5/month, but with a £2 monthly fee). Or if you just want the £200, you can switch to the fee-free NatWest Select, RBS Select or Ulster Select accounts. 
    • HSBC: FREE £200
    • Switchers get £200 FREE cash.
    • The HSBC Advance account is fee-free with no minimum monthly pay-in required. You can open a linked 5% regular saver and put in up to £250/month.
    • Who can get the bonus?
      – You can’t have had an HSBC current account, or opened one with its sister bank First Direct, since 1 January 2020.
  • First Direct: FREE £175 + top service
  • FREE £175, TOP service, 7% saver and a £250 0% overdraft.
  • In addition to the free switch cash and top service, First Direct’s 1st Account gives you access to a linked regular saver which pays 7% interest on up to £300/month, and many get an ongoing £250 0% overdraft.
    Who can get the bonus?
    – You can’t have ever had any account with First Direct (such as a current account, credit card or mortgage).
    – You can’t have opened a current account with sister bank HSBC since January 2020.

Lloyds: FREE £150 + a year’s Disney+

  • FREE £150, plus choose a reward from 12 months of Disney+, six cinema tickets, a Coffee Club & Gourmet Society membership or a magazine subscription.
  • On top of the upfront switch cash, the Club Lloyds account gives you the choice of one of the above rewards each year. Do note there’s a £3/month fee unless you pay in £2,000+ a month. You also get access to a linked regular saver paying 6.25% fixed interest on up to £400/month.
  • Top for longer-term rewards
    • Santander: 1% bills & supermarket/travel cashback
    • Get 1% cashback on bills and supermarket / travel spending (£3/month fee).
    • With the Santander Edge, you get 1% back on water, energy, council tax, mobile, phone, broadband and paid-for TV bills, as well as 1% on most supermarket and travel spending. You can earn up to £10/month for each – so £20/month max (£17 after the fee).
    • You also get a linked 4% easy-access saver where you can put up to £4,000 (this can’t be opened jointly). To get the interest and cashback, you must pay in £500+/month and have 2+ direct debits.
    • If you have high energy/water bills and/or a Santander mortgage, the 123 account is worth a look as it may earn you more cashback… even though it has a higher monthly fee.
  • Chase: 1% cashback + 3.3% interest 
    • 3.3% interest, 1% cashback + 5% ’round-up’ interest.
    • Open a Chase current account, then open the 3.3% savings account from within the app (needs at least iOS 14.1 or Android 8.1.
      The good news is with Chase, you also get other rewards. The current account gives 1% cashback for at least a year on most debit card spending (max £15/month). There’s no minimum pay-in required in the first year, but you’ll have to pay in £500+/month after that to continue getting cashback.
    • You also get fee-free spending and withdrawals abroad, 5% interest on small amounts through its ’round-up’ feature, and 1% interest on the balance in your current account.
  • Top accounts for those that are savers;
    • Barclays: 5.12% on up to £5,000
    • 5.12% interest on £5,000 – though there are a few hoops to jump through.
    • If you open a Barclays Bank Account and then join its Blue Rewards scheme, you can then apply for the linked 5.12% Rainy Day Saver account. You can pay in more than £5,000, but anything above will get just 0.15% interest.
    • Blue Rewards requires you to pay £800+ into the current account, sign up to online or mobile banking and pay a £5/month fee (though it pays £5 cashback each month you pay out 2+ direct debits – so the fee is essentially waived).
  • Nationwide: 5% on £1,500, but only for a year
    • 5% fixed interest – but it’s only for a year.
    • The Nationwide FlexDirect account pays a decent 5% in-credit interest on up to £1,500 (nothing above), but the rate drops to 0.25% after a year. The 5% interest is only for FlexDirect newbies – if you’ve had this account before you’ll get just 0.25%.
  • Top Accounts if you are using your overdraft:
    • First Direct: £250 0% overdraft
    • Ongoing £250 interest-free overdraft and TOP service.
    • First Direct’s 1st Account offers many a £250 0% overdraft, though it’s not guaranteed – use its eligibility checker before applying. Expensive interest does kick in above that, so this account is probably only good for you if you use your overdraft for limited amounts.
    • PS: You can get a FREE £175 for switching over an existing account.
  • Nationwide: 12-month 0% overdraft
    • A year’s interest-free overdraft, with a limit up to £1,500.
    • Those new to the Nationwide FlexDirect account can get a 0% overdraft for a year (though it’s credit-check dependent). After a year you’ll start paying a hefty rate of interest, so clear as much of your debt as you can by then.
  • Top if you want insurance
    • Virgin Money: £500+/year insurance for £150/year
    • Get £500+/year of travel, mobile & breakdown cover for £150/year.
    • The Virgin Money Club M has the lowest fee on packaged accounts, and is especially good for families as you get cover for all family phones and gadgets, plus worldwide family travel insurance (max age 75). You also get UK breakdown cover for the account holder(s). See full What the insurance covers info.

Although not an exhaustive list we hope this helps you to get the most from your savings or spending. 

Sources:

– Best cashback and reward credit cards – MoneySavingExpert

– Best bank accounts: Up to £200 to switch or up to 7% interest – MSE (moneysavingexpert.com)