Santander has launched a new cashback current account called Edge that offers the chance to earn money back on both debit card spending and direct debits, plus a linked savings account paying 4% AER.
You can earn up to £20 cashback a month on essential spending, such as grocery shopping, transport costs and some household bills, but there are limits and caveats to take into account, and it also comes with a £3 monthly fee.
The launch comes as Santander's 123 Lite account is withdrawn for new customers. 123 Lite also offered cashback and cost £2 per month.
Here, Which? looks at what the Edge current account offers and how it compares to other cashback debit cards.
What does Santander Edge offer?
Santander Edge is most notable for paying up to £20 cashback a month on both debit card spending and direct debit payments, however you'll only get cashback when you spend on certain things.
You can earn 1% cashback capped at £10 a month for debit card spending on 'essential' grocery shopping and transport. Qualifying spending includes:
- Service stations and petrol stations
- Automated fuel dispensers
- Rail journeys
- Bus journeys
- Local commuter transport
- Electric vehicle charging points
- Supermarket and grocery stores
- Convenience stores
- Food markets
- Vending machines
- Speciality food stores.
An additional maximum of £10 per month is from 1% cashback offered on household bills paid via direct debit. These include:
- Council tax bills/domestic rates
- Gas and electricity bills
- Water bills
- Mobile phone and home phone bills
- Broadband bills
- TV packages.
There's a £3 monthly fee, and you'll need to pay in at least £500 each month, plus have two active direct debts to maintain the account and qualify for cashback.
How to cover the fee and earn maximum cashback
Qualifying spending of at least £300 per month would cancel out the £3 monthly fee on the account.
However, to earn the maximum £20 cashback a month, you'd need to spend at least £2,000 across all of these categories, with £1,000 spent on your debit card and £1,000 in qualifying direct debits.
Linked instant-access savings account
Anyone who holds the Santander Edge current account can access its linked Santander Edge saver.
This is an instant-access account that pays a variable rate of 4% AER on balances up to £4,000. However, after the first 12 months, the interest rate will drop to 3.5% AER and there's no interest on cash exceeding the £4,000 limit. Even after the interest rate drop, this is a higher rate of interest than other restriction-free instant-access accounts on the market.
If you save the maximum £4,000, it means you could earn a maximum of £13.10 interest per month, but note that you won't benefit from compound interest, as anything above £4,000 won't earn any interest. If you have a larger amount to save, it's best to put anything over £4,000 elsewhere.
- Find out more: how to find the best savings account
How does Santander Edge compare?
If you're looking to earn cashback on your spending, it's worth seeing how Santander Edge compares when it comes to how much you can earn each month.
We've summarised other accounts with the highest cashback offers in the table below, listed in alphabetical order:
| Account | Cashback offer | Maximum monthly cashback | Other rewards | Monthly fee |
|---|---|---|---|---|
| Barclays Blue Rewards | Need to pay out two direct debits, pay in £800 and cover the £5 Blue Rewards fee. Additional cashback is available if you own other Barclays products, such as £3 cashback a month if you have a Barclays mortgage | £5 (plus extras if you have certain Barclays financial products, such as a mortgage, life insurance or home insurance) | Exclusive access to certain products, including Rainy Day Saver, paying 5.12% AER on balances up to £5,000 | £5 |
| Chase | 1% on debit card spending for the first year. | No limit | 5% AER on 'round up' savings, but after a year these are transferred back to the current account, when savings start again | Free |
| NatWest and Royal Bank of Scotland Reward accounts | Can earn £4 for paying out two or more direct debits, plus £1 for logging into the mobile banking app each month. You must pay in £1,250 per month into an eligible NatWest account | £5 | Additional 1% cashback at certain retailers | £2 |
| Santander 123 |
1% on council tax, mobile, broadband and Santander mortgages capped at £5. 2% on energy bills capped at £5. 3% on water bills capped at £5. |
£15 | Pays 1.5% AER on balances up to £20,000 | £4 |
| Santander 123 Lite (closed to new customers) |
1% on council tax, mobile, broadband and Santander mortgages capped at £5 2% on energy bills capped at £5 3% on water bills capped at £5 |
£15 | None | £2 |
| Santander Edge |
1% on qualifying grocery and travel spending capped at £10 1% on qualifying household bills direct debits capped at £10 |
£20 | Linked Edge Saver account, paying 4% AER on balances up to £4,000 | £3 |
| TSB Spend & Save Plus | Cashback for every month you make at least 30 debit card payments online or in-store | £5 | £100 interest-free arranged overdraft. Linked Savings Pots earn 1.52% AER, including a bonus of 1.12% for a year | £3 |
A lot of these accounts come with some tricky terms that you'll have to navigate if you want to make sure you're earning the maximum amount of cashback each month.
The majority also come with monthly fees, so you should weigh up whether the rewards on offer are worth the money you'll pay out.
For a more detailed look at what each account offers, see our guide to the best bank accounts for cashback.
Should I switch my current account?
While features such as cashback can be really handy, the fact that Santander Edge comes with a £3 monthly fee means it's only really worth switching to if you're going to earn enough through cashback and savings interest to make this spend worth it.
If, for instance, you prefer to pay for groceries and transport on a credit card, or you don't have direct debits set up for your household bills, then a different account may be a better fit for you.
As it's likely to be the financial service you interact with most often, your current account should suit your circumstances and preferences – for instance, a mobile-only bank account wouldn't suit someone who prefers to go into a branch.
It's also worth seeing how a potential new provider fares in terms of customer service and security. Every year, we research the best and worst banks where you can see how dozens of banks have been rated.
- Find out more: how to switch your bank account
source https://www.which.co.uk/news/article/santander-launches-new-edge-cashback-current-account-should-you-switch-a86nz1Z9AojV