Supermarket Christmas boost

Don't think of the bonus as a gift – it isn't the supermarkets being generous, it's good business acumen. You save for a year, they earn interest on your money, and eventually give you a little back. And more importantly:

You must spend your savings and the bonus at that specific supermarket so it essentially locks in your custom.

You won't be surprised to hear that there are some exclusions on what you can buy – you can't usually spend them on lottery tickets, petrol or goods from third-party concessions (when a retailer has a space in a larger store). Some supermarkets also don't allow you to redeem them online.

The bonus you get from most schemes expire within a short time period – the retailer's way of ensuring you spend your money before Christmas (to be fair, these are Christmas savings schemes). Here's a rundown of how long you have to spend the bonus, for each scheme:

• Asda: Two years from the date of your last transaction

• Co-op: Doesn't expire, but can only be used each December

• Iceland: Doesn't expire

• Morrisons: Must be used by end of December

• Sainsbury's: Expiry date is printed on the card, typically mid-January

• Tesco: Bonus expires two months after you receive it in mid-November

Note that the money you put into the scheme as savings usually doesn't expire, or at least you're given several years to spend it.

It's important to understand these schemes DO NOT have the same protection as savings in a bank. In fact, this is exactly what happened with the 2006 Farepak debacle. It's the reason we've always cautioned against savings clubs.

But don't confuse this with normal savings accounts provided by supermarket-branded banks, such as Tesco Bank or Sainsbury's Bank – they have the usual £85,000 per person protection. See our Safe savings guide for more info on the Financial Services Compensation Scheme. 

If saving for Christmas over the year – a fantastic aim – save your money in a bank account (see Top savings accounts and Top cash ISAs). Then withdraw the cash and buy savings stamps the day before the bonus date – there's more on this below. This way, you also earn double interest – from the savings account AND the savings scheme.

The Government plans to make sure these schemes have protection

In April 2022, the Government announced plans to ensure that any supermarket operating a savings scheme protects its customers' money. The plans suggested that either the money would be insured, or it would be held 'in trust' away from the scheme's own operating cash. Either way, it'd mean that if the scheme itself ran in to difficulties, you'd get your money back.

However, the new laws need to be approved by parliament – we'll update this guide with details of the new protections once that has happened. 

Supermarkets tend to pay the bonus on a specific day or month, normally during November or December. The bonus earned only depends on how much is in there, not how long it's been there. Therefore, you can simply...

Buy all the stamps/credit required just before the bonus date, get the full bonus, then use the funds to shop.

As this technique's about keeping a small sum of cash on the cards for just a couple of days, the risk's reduced. The chance of a big supermarket going bust in that time is slim, though nothing's impossible.

Remember, you must spend the cash at that specific store, so only do it if you would've spent there anyway. Keep your card or stamps booklet safe, as many supermarkets don't keep a record of your savings, unless it's an online scheme. So lose it, and your money's gone.

Most of the schemes only allow customers to get one card per person. However, Asda allows you to get as many of its Christmas Savings Cards as you like, so if you plan to spend very heavily on your Christmas shop at Asda, you could get a slightly bigger boost by getting multiple cards. Co-op's scheme, where you buy a stamp book for £48 and get £50 off your shop, also lets you buy multiple books.

For the other schemes, if you plan on spending more than the max bonus amount at one shop, multiple members of your household could sign up and you could split your Christmas shop budget across different cards to max out the bonus.