Reward Bank Accounts
What is a reward bank account?
Some bank accounts offer rewards to their customers, which can vary from cashback, car breakdown cover, mobile phone insurance, offers at high street shops and various other rewards.
How do they work?
Often the accounts require that the user pays either a monthly fee or a certain amount into the account on a monthly basis, usually their salary.
In return they get benefits that would cost several times more if purchased individually.
Banks can purchase things like AA membership, mobile phone and travel insurance in bulk, and can then include it in their customers account packages a lot cheaper than if purchased on an individual basis.
What are the benefits?
The main benefits of this type of bank account are that you get a range of products a lot cheaper than you would if you purchased them individually.
Annual travel insurance can cost around £40 a year, while car breakdown cover is around £60 a year and mobile phone insurance roughly £10 a month, which equates to £220 a year, for just £10 a month from a reward account, saving £100 a year.
Add the discounts gained from high street shops, restaurants and other outlets that are included in these accounts and the user can gain quite a big saving throughout the year.
It’s important to check that any travel insurance offered covers everything you do, including things like skiing.
Breakdown cover offered is often the most basic, and may require upgrading for certain users.