Top cashback bank accounts in the UK: features, costs, and tips
A guide to the best cashback bank accounts in the UK. Check out the details on Santander, Chase, Halifax, TSB, Lloyds Bank, and many more.
Whether you’re thinking of moving to the UK or you’ve arrived there already, at some point you’re going to need a bank account.
In the past, opening a bank account in the UK was very difficult if you were new to the country. Thankfully, these days, it’s become slightly easier.
Here’s how to go about it.
To open a UK bank account, you’ll need two documents: one to prove your identity and one to prove your address. This applies both in-branch and online.
Proving your identity is simple. You just need your passport, driving licence or identity card (if you’re an EU national).
You’ll also have to prove your address by providing another document.
Every bank has its own list of documents that are acceptable as proof of address. Broadly speaking, these include:
a tenancy agreement or mortgage statement;
a recent electricity or gas bill (less than 3 months old);
a recent (less than 3 months old) bank or credit card statement that’s not printed off the internet; or
a current council tax bill.
Of course, if you’re new to the UK, you probably don’t have any of the documents on this list.
Luckily, in recent years, banks have become a bit more flexible in terms of what documents they will accept as proof of address.
If you’re in the UK to study, for example, many banks will accept a letter from your University’s admissions office confirming your address.
Many banks will also accept a letter from Jobcentre Plus confirming your National Insurance number or even a letter from your employer, as long as it’s less than three months old.
There is also another way.
Before you leave for the UK, go to your bank and ask them to change your correspondence address to your UK address. You may also be able to do this via internet banking.
Once you’ve changed your address, ask your bank to send a bank statement to your new address by post, and you’ll have a document that proves your UK address.
If you don't have a proof of address in the UK and you need to open an account, Wise's multi-currency account may be the right choice for you. You can supply a proof of address from your standard list of documents and do verification online.
Yes, you can.
Your home bank may be able to set up an account for you if it has acorrespondent banking relationship with a British bank.
Many major UK banks also have so-called ‘international’ accounts. These are designed specifically for non-residents, so they’re a great option if you don’t have the documents to prove your UK address. In fact, you can even apply for an international account online. Barclays, Lloyds, HSBC and NatWest all offer international bank accounts.
However, opening a bank account from abroad or an international account may not be the right choice for you.
Very often, you’ll have to make a big initial deposit and commit to paying in a minimum amount of money each month. Some banks will also charge you a monthly fee in addition to these requirements. This can make your bank account expensive to open and run, especially if you still don’t have a job.
There may also be other restrictions. For instance, you may not be able to close the account and switch to a better deal until a set period of time expires.
Old-world bank accounts only work properly in one country. They hold money only in one currency. And it gets expensive when you try to use them across borders. Wise's multi-currency account can solve all of this.
Now you can send, receive and organise your money internationally, without crazy fees or even-crazier exchange rates – just a small, fair charge when your money moves between currencies.
Unfortunately, there is no straightforward answer to this question.
The banking industry in the UK is very competitive, and many banks have special products designed to attract specific types of customer.
This is great news. Whether you’re a student, a professional or a business, you’re bound to find something to suit your needs.
That said, you’ll also need to consider your personal circumstances, preferences and what you need the current account for.
Because you’re new to the UK, you have a limited credit history and not much documentation. Some banks are strict with their requirements, so opening a bank account with them will be difficult.
It’s usually easier to open an account with one of the UK’s largest banks - Barclays, Lloyds, HSBC or NatWest. These banks have been in business for a long time and are very safe. They also have a lot of experience dealing with foreigners, so they’re a bit more understanding of your situation and flexible with their requirements.
Your nationality will also play an important role. It’s probably easier to open a bank account if you’re an EU national than when you’re from a country outside the EU.
Either way, it’s a good idea to get in touch with customer support before you try opening an account. That way, you can get more information and ask questions about any difficulties you may have.
There are more than ten retail banks in the UK, each with their strengths and weaknesses. However, the biggest four UK banks are Barclays, Lloyds, HSBC and NatWest.
Let’s have a look at what each of them have to offer.
Barclays is one of the oldest banks in the UK; and has more than 1500 branches around the country.
It’s also probably one of the easiest banks to open an account with if you’re new to the UK. In fact, you can even pre-apply for an account online before you arrive in the UK.
The account is free and comes with a contactless visa debit card as standard. However, you won’t be able to use your account immediately. Once you’re in the UK, you’ll have to visit a branch with your reference number, passport and proof of address in order to activate the account.
Barclays also has special accounts for students and businesses.
The international student account is free and offers cashback from various shops. It includes a free overdraft of up to £3,000 for three years and a contactless debit card. You also get a 12-month subscription to Perlego, which gives you access to more than 400,000 academic and non-fiction eBooks.¹
The account includes a free overdraft of up to £3,000 for three years and a contactless debit card.
Barclays also offers a few different business accounts, depending on the yearly turnover rate.
You can get in touch with customer support via a live chat, where you can discuss the details of your application and ask questions in real time.
Lloyds is the largest provider of current accounts in the UK, and has about 1100 branches throughout the country.
Opening a bank account is very easy, even if you have just arrived in the UK.
Lloyds has a special new to the UK account which you can normally open with just your passport or identity card (if you’re an EU citizen). The account is free and comes with a contactless visa debit card as standard.
Lloyds also has an account especially for students and it offers a free overdraft of up to £1,500 for three years.²
You can open a business account with Lloyds too. Depending on the size of your business, there are three accounts to choose from. The one with the £0-£3M turnover is free for the first 12 months. You’ll also get a range of business tools, including accounting software and legal assistance at a reduced price.³
HSBC has more than 1100 branches around England and Wales, but a lower number in Scotland and Northern Ireland.
HSBC’s biggest advantage is that it operates in about 64 countries around the world. If you bank with HSBC in your home country, they can help you set up an account in the UK before you get here.
The basic current account is ideal for the essential day-to-day banking. It has no monthly fees and it comes with a contactless Visa debit card. You can also withdraw up to £300 per day. However, it’s important to note that the basic account doesn’t offer an arranged overdraft.⁴
The student account offers a free overdraft of £1000 in the first year. In the second year, you can request an increase of £2000.⁵
The bank also offers helpful student guides that can help you manage finances more efficiently.
If you want to open a business account, there is a range of business bank accounts to choose from. Most of them are free for the first 18 months and include perks such as a dedicated relationship manager to help you build your business and a knowledge centre with training articles and videos.⁶
The bank’s Select current account is free to use and comes with a contactless visa debit card as standard. You’ll also get access to an emergency cash service, so you can withdraw money from your account using just a security code if your card is lost or stolen.⁷
NatWest also has excellent student and business accounts.
If you’re a student, you'll get a free overdraft of up to £2,000 for three years. You can also choose between 3 useful offers by the bank: Amazon Prime Student membership, National Express Coachcard or a tastecard.⁸
If you’re just starting a business, you can choose NatWest’s Startup account which offers free financial services for the first 18 months. This package also offers access to their learning platform and business growth events.⁹
You can contact customer support via a live chat, where you can discuss the details of your application and ask any questions in real time.
While Barclays, Lloyds, HSBC and NatWest are the four biggest banks in the UK, there are also other banks you can check.
TSB is quickly gaining a reputation as one of the best banks in the UK. It’s quite easy to open an account, even if you’re new to the UK; and the Classic Plus account has some great perks.
These include 1.49% gross variable interest paid on balances up to £1,500 and £5 cash back for debit card transactions (terms and conditions apply). ¹º
TSB’s student account offers overdraft protection of up to £1,500 and 4.89% gross variable interest on the first £500.¹¹
Santander is very popular because of its 1|2|3| account. This one offers up to 3% cashback on household bills and 0.60% gross variable interest, on balances up to £20,000.¹² Unfortunately, you’ll need to undergo a credit check when you apply for this account, so if you’re new to the UK you probably won’t qualify. However, once you’ve been in the UK for a while (perhaps a year or so), it’s a good idea to look at it.
Of course, it’s always best to look at what different banks have to offer and see who has the best deal. Don’t commit to a product without at least having a look at what else is out there.
You can get a basic current account at no monthly cost from most high street banks. This should be more than enough for your everyday banking needs.
Most banks also have premium accounts that offer additional benefits such as cashback on household bills, in-credit interest and insurance. However, these accounts will often have monthly fees and minimum eligibility requirements; and you may not qualify if you’re new to the UK.
You’ll also need to be careful to stay in credit. Unless you have a planned overdraft facility, your bank may charge large fees if you withdraw more money than you have in your account. It’s always a good idea to read through your bank’s terms and conditions. That way, you’ll avoid any nasty surprises.
Withdrawing money from an ATM is free if you use one of your bank’s ATMs. Many banks also offer free cash withdrawals even if you’re not a customer.
However, some ATMs aren’t free; and can charge you between £1.50 and £3 per transaction.
If you’re not using one of your bank’s ATMs, check the machine first. Many ATM machines will state that they are free. Similarly, some paid machines will warn you about charges before you can complete the transaction.
Using an ATM outside the UK is never free.
Many banks will charge a non-sterling transaction fee, which can be as high as 2.99% per transaction. Some banks will also charge a cash withdrawal fee in addition to the non-sterling transaction fee.
More importantly, if a foreign ATM asks you which currency it should charge you in, always choose to be charged in the local currency. If you don’t, you’ll get an unfavourable exchange rate plus the fees charged by your UK bank.
If you do want to manage your money across more than one country, there’s a cheaper way to do it than using your UK bank.
Open a Wise multi-currency account and you can send money worldwide for low fees and the real, mid-market exchange rate. This means no mark-up added on top.
With Wise, you can get your own international debit card, which automatically converts currency to the best possible rate whenever you spend. You can use it in 200 countries, including the UK, to spend, shop and withdraw cash from foreign ATMs without the high charges. In fact, if you have the currency in your account, there’s no fee to pay at all.
Wise is FCA regulated and uses sophisticated security measures to keep your money safe, wherever you are in the world.
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
A guide to the best cashback bank accounts in the UK. Check out the details on Santander, Chase, Halifax, TSB, Lloyds Bank, and many more.
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