Energy firms are offering households returns of up to 5pc on their “in-credit” balances, more than most bank accounts.
Bristol-based supplier Ovo offers customers an “interest reward” if they pay in advance by direct debit.
It pays 3pc in the first year, 4pc in year two and 5pc from the third year onwards, on in-credit balances up to £1,000.
Ovo said the reward is tax-free because the credit is used to reduce the amount customers pay rather than increase their balance.
On the banking side, Nationwide is the only current account provider offering 5pc interest. This is paid on £2,500 deposits for 12 months as long as customers credit their account with £1,000 a month.
Nationwide, Marks & Spencer and First Direct’s regular savings accounts also pay 5pc on much smaller sums.
Ovo calculates the interest based on what’s left in your account after charges and will add it to your credit whenever a bill is produced.
Don’t be tempted to overpay your bill just to get the reward. If you do and Ovo suspects, it will not pay out.
Iresa, another small supplier, offers customers 4.5pc interest on credit balances every month.
Scottish Power also operates a similar scheme. It pays back £1 for every full multiple of £33 above the minimum credit value of £100, as seen in the chart below.