NatWest and Royal Bank of Scotland have cut the cashback they offer more than 1.9 million Reward current account customers from 3% to 2%, and dropped the monthly fee from £3 to £2 – here's how to check if it's still the best cashback account for you.

The changes will affect new and existing Reward customers at the two sister banks from Monday 26 June. NatWest and Royal Bank of Scotland (RBS) have also introduced a hefty minimum monthly pay-in of £1,500 for new customers – existing customers who had an account before 26 June won't be affected by this.

For a full rundown of the best-paying bank accounts see our Best Bank Accounts guide.

How is the Reward account changing?

Here are the Reward account changes at a glance:

NatWest/RBS Reward account changes

Monthly charge Cashback rate on household bills Minimum monthly pay-in
Now £2/mth (£24/yr) 2% £1,500 for new customers only
Before 26 June 2017 £3/mth (£36/yr) 3% N/A

How does it stack up against its biggest rival Santander 123 Lite?

To see whether the account's still worth it, we've compared it with its closest rival on the market, Santander's 123 Lite account. It pays cashback on the same bills as NatWest for a lower £1 monthly fee.

Santander 123 Lite pays 3% on mobile phone, home phone, broadband and paid-for TV bills, 2% on gas and electricity, and 1% on water and council tax bills, while NatWest and RBS pay 2% on all these bills. Santander also pays 2% on its home insurance and 1% on its mortgages (capped at £10/month). As a rule of thumb:

  • If you have a Santander mortgage... Santander 123 Lite wins.
  • If you don't have a Santander mortgage... the 123 Lite will still win if you've low or typical bills, but NatWest/RBS Reward can beat it if you've high bills, especially if you pay a lot for water or council tax.

Here's how much cashback you'd expect to earn with NatWest and Santander if you've low, typical and high bills:

NatWest/RBS and Santander cashback compared

TYPE OF BILL Typical annual cashback earnings
Low bills Typical bills High bills

NatWest/RBS Reward

San 123 Lite

NatWest/RBS Reward

San 123 Lite

NatWest/RBS Reward

San 123 Lite
Water £5.30 £2.60 £7.90 £4 £13.80 £6.90
Council tax £21.20 £10.60 £31.80 £15.90 £63.60 £31.80
Santander mortgage N/A £30 N/A £66 N/A £120
Gas and electricity £14.90 £14.90 £23.30 £23.30 £34 £34
Mobile phone £7.10 £10.60 £10.60 £15.90 £18.60 £27.90
Home phone £3.60 £5.40 £5.40 £8.10 £9.50 £14.20
Broadband £2.40 £3.60 £3.60 £5.40 £6.30 £9.50
Paid-for TV £0 £0 £7.50 £11.30 £13.20 £19.70
Fee £24/yr £12/yr £24/yr £12/yr £24/yr £12/yr
TOTAL after fee (incl Santander mortgage) £30 £66 £66 £138 £135 £252
TOTAL after fee (excl Santander mortgage) £30 £36 £66 £72 £135 £132
Amounts rounded. Based on typical bills provided by firms and Government bodies.

It's hard to say the exact point the NatWest/RBS account will beat 123 Lite, as it depends how much you spend on the individual bills involved. As NatWest/RBS pays more cashback than 123 Lite on water and council tax, the higher your bills for those, the more likely NatWest will win. The opposite is true for mobile and home phone, broadband and paid-for TV.

You can work out which account would win for your circumstances using Santander's and NatWest's cashback calculators.

Bear in mind that the Santander 123 Lite account also pays 2% cashback on Santander home insurance, which can further add to your cashback total – though always check first if it's the right insurance for you with our Home Insurance guide.

It's important to point out too that Santander has another account, the 123, which offers the same cashback as the 123 Lite. It also pays 1.5% AER variable interest on up to £20,000, but has a higher monthly fee of £5. The increased fee means you're often better off with 123 Lite – our analysis shows unless you've more than £19,200 in savings you'll likely earn more by having a Santander 123 Lite account and stashing your savings in a top easy-access savings account, which currently pay up to 1.25%.

This analysis is really aimed at those who have a separate bills account and want the maximum cashback. There are lots of other ways to make money from your bank account – some high-interest accounts pay up to 5%, while others offer switching bribes of up to £150. See our Best Bank Accounts guide for more info.

New NatWest/RBS minimum pay-in

Another factor to consider when choosing between NatWest/RBS and Santander is the minimum monthly pay-in – lower earners may struggle to meet the new £1,500/mth minimum pay-in requirement of the Natwest and RBS Reward account.

Sometimes it can be possible to recycle the same funds in and out of an account to meet the minimum pay-in – see our How to jemmy point for more on this.

The Santander 123 Lite has a lower minimum pay-in of £500/mth.

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