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NatWest & RBS Ending Bills Cashback Scheme

If you’re a customer of NatWest or RBS (Royal Bank of Scotland) and are on one of their rewards accounts, then you’ll want to hear about upcoming changes to your account. The banks are ending their cashback rewards on bills starting February 1, 2020. They’ll be altering the programs to give incentives, instead, when you log in to you account and/or have direct debits.

Some 1.7 million customers, or possibly more, are set to be affected by these changes, so chances are that you’ll also be affected. Individuals who have Premium accounts will also be affected, we’ll take a look at these accounts later in the article.

The Current Standard Rewards Program

Under the current scheme, customers of the banks’ reward accounts receive 2% cashback on 7 household bills, which can include: gas, electricity, water, council tax, mobile, landline & TV packages and broadband, if they’re paying by direct debit. Customers do have to pay a monthly fee for the standard reward accounts.

Right now, NatWest & RBS also offer a £150 switch incentive to get you to change accounts from competitor’s banks.

However, starting on February 1st, the programs change, and you’ll earn £1 per month for accessing your account through the banking app, and £4 per month for having two direct debits at £2 each. In other words, you’ll no longer be earing cashback when paying bills via direct debit. In addition, the incentives are capped at £5 a month; however, right now, the cashback has no limit in place.

But wait, there’s more! You’ll also have to pay a £2 monthly fee for the standard reward account, meaning that you’ll then only earn £3 a month (not £5), for a total of £36 a year. That’s a big change from the way the program runs now.

Who Could Benefit Under the New Program?

As a result of these changes, most standard customers will actually earn less than they do now on the current cashback scheme.

Under the current standard reward program, the cashback you earn depends on the amount you spend on bills each month. If you spend about £250 a month, then your eligible bills earn you about £36 per year, which is about the same as the you’ll under the new program.

However, the average customer now earns about £59 per year in cashback (after the fee), so under the new program, they’ll earn less.

The new program may actually benefit a few customers, while others will find they earn lower cashback each month when the program changes over in February.

 

 

Will the Other Rewards Accounts Be Affected, too?

Yes, as a matter of fact. The Reward Silver, Reward Platinum, Premier Reward and Premier Reward Black accounts now earn 2% cashback on seven household bills. However, these programs will change also. Under the new scheme, cashback will be replaced with incentives for logging in to the mobile app and paying certain bills via direct debit.

With the Reward Silver and Reward Platinum accounts, you’ll be able to earn £5 per month, and will still have access to the perks that include travel insurance and mobile, after paying the monthly fee. You’ll earn £1 each month for logging into the mobile banking app, and £4 a month for having two direct debits of at a minimum of £2 each.

Premier Reward and Premier Reward Black accounts will be able to earn $10 each month. These accounts include monthly fees are only available to individuals who have high incomes. After the changes take effect, you’ll receive £1 a month for logging into the mobile banking app, and then £9 a month cashback for having two direct debits of at least £4.50 each. So, if you have one of these accounts, you could actually make more after the change comes into effect.

The other perks that go with all of the Rewards accounts, such as earning 1% back in rewards when you make purchases at the bank’s retail partners, will remain the same.

What’s the Reason for the Changes?

According to a NatWest spokesperson, “We are changing our Reward accounts so our customers will know exactly how much they will receive each month.

“Interest rates are expected to remain lower for longer. This change ensures we can continue to offer our customers a monthly reward.”

What Switching Accounts?

That’s always an option that you have available if you become dissatisfied with one bank. Moving to another can offer some benefits and perks depending on the type of account you’d like.

Many people choose to make a switch these days, why? They may be looking for:

  • Account features (such as Internet banking)
  • Better customer service
  • Cash incentive for switching banks
  • Cheaper or free overdraft
  • Earning interest on their balance
  • A better cashback or rewards program

How to Choose a New Bank Account

It will depend on what services/perks you need and want. Let’s take a look at a few things you might consider:

1). If you frequently overdraft, then you might want to choose a bank account that offers free or cheaper overdraft services, which can save you a lot of money. Overdraft fees tend to be pretty expensive. You may find some accounts don’t require that you keep a specific balance at all times in your account. In fact, these are great if you have a smaller income and frequently overdraft your account.

2). If you usually have a positive balance in your account, you might want to look for a new bank account that pays interest on your balance, or perhaps offers other benefits. Look for banks that offer high interest—many of them will pay interest either monthly or annually. Watch out for accounts that limit the balance they pay interest on.

Another option is to choose a rewards account, rather than interest paid on the balance. These accounts are similar to the NatWest & RBS offer cashback. New accounts may offer cashback when you use your debit card and/or for paying bills by direct deposit.

4). Bundled bank accounts, where you a monthly fee, can offer some great benefits including:

  • Breakdown coverage
  • Travel insurance
  • Home contents insurance
  • Mobile phone insurance
  • Savings accounts

These types of accounts can save you money, but they can sometimes be more expensive than buying these services separately.

When shopping for a new bank account, be sure to read the fine print and ask questions if there are things you don’t understand about the account. You want to make sure to completely understand what you’re getting, and the fees involved, etc.

What if You Have Bad Credit?

You may still be able to switch accounts, but you’ll want to look for basic or prepaid bank accounts. Keep in mind these won’t offer as many features, but they may be able to accept you, even if you have bad credit. For example, you may find these accounts don’t offer overdrafts. In this case, you’ll have to be very careful about spending only the money that’s in your account and no more.

With these types of bank accounts, your wages can be paid in, you’ll be able to withdraw cash and make payments using a prepaid card that comes with account. You’ll also be able to pay bills via direct debits.

These banks generally don’t run credit checks when you apply, but you will need to prove your identity and that you have a permanent address in the UK.

How to Switch Accounts

Switching couldn’t be easier! When you’ve decided on the best account for your circumstances, then all you have to do is fill out an application. The new bank may provide an online form, or you may be able to apply by post, by visiting a branch or even by phone. It will depend on the bank you’ve chosen.

On the form, you’ll be asked several questions and you’ll have to supply your personal details, which may include your old bank account number, sort code, bank name, debit card number, etc. The new bank will generally run a credit check and may require additional paperwork to prove who you are.

You’ll also need to complete a Current Account Switch Agreement and a Current Account Closure Instruction. These are part of the switching service, which allow the banks to do all the work in transferring your accounts, so you don’t have to worry about it yourself. The only other thing you’ll have to do is let your old bank know you want to close the account and let the new bank know the date you’d like to have the account switched over to them.

All through this process, the bank will keep you informed, so you’ll know what’s going on. If anything happens does wrong during the switch, you’ll be notified, and the bank has to pay you back if your funds are lost. They’ll also have to pay if you lose interest or are charged fees during the switch.

The new bank will even make sure your salary and pension go into your new account. The best thing is this is a free service, though you’ll have to pay any fees that may come with the new bank account.

Summing It All Up

While NatWest & RBS are changing their Rewards accounts starting February 1, 2020, you still have options. If you feel the new scheme won’t be much of a benefit for you, then it may be time to consider switching banks.

Switching banks has never been easier! Just be sure to find a new account that works with your circumstances and makes good financial sense.

 

Useful Links:

Natwest: https://personal.natwest.com/personal/myrewards.html

RBS: https://personal.rbs.co.uk/personal/current-accounts/cashback-plus.html

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