Challenger banks Chase and Zopa have this week boosted cashback on their current accounts giving you the chance to earn more on bills and everyday spending.

Both have doubled the level of cashback – Chase from 1 per cent to 2 per cent and Zopa from 2 per cent to 4 per cent.

But the devil is in the detail, with caps limiting the amount of cashback you can earn. Each bank has different qualifying spends too.

Chase pays cashback on groceries, fuel and everyday transport, and has this week added restaurants, cafes and takeaways to that list. 

Spends made using a Chase debit card and credit card are eligible.

With cashback capped at £20 a month you could earn a cool £240 in the year – but you'd need to spend at least £1,000 a month.

On the other hand Zopa pays cashback on just £2,000 of your direct debits in the year, so the maximum you can earn is a slimmer £80.

'The 4 per cent figure is eye-catching and initially makes Zopa seem like the frontrunner but, when you dig into the details, it pales in comparison to the new Chase cashback offer,' said Kate Steere, personal finance expert at the comparison website Finder.

Cashback incentives can be lucrative. But it's important to compare the whole package before going ahead with an account – such as interest rates on linked savings accounts and whether it offers other rewards and benefits.

Chase: Lucrative if you can maximise the deals

Chase was once cashback king and paid 1 per on most spends made on its debit card – even on transactions abroad.

But last year it restricted eligible spends to UK groceries, transport and fuel.

The cashback rate hike and extension of eligible spends to include restaurants, cafes and takeaways is therefore a move in the right direction.

It's possible to earn £240 cashback across the year but it comes with 'strings attached' to encourage loyalty, says Kate Steere of Finder.

You must make 15 or more debit or credit card transactions or direct debits each month – and maintain at least a £1,000 balance in Chase savings accounts – to qualify.

The good news is that Chase is paying a boosted 4.5 per cent interest on its easy-access savings account for 12 months for new customers. 

It's also offering a higher 5 per cent rate when you round up your spending to the nearest £1 in a separate account.

Whether you want to put in the effort to maximise your earnings is a separate question.

You need to make sure you use your Chase debit card on all eligible spends and squirrel away some money in the linked savings account, which is a tax bearing account unlike an Isa. 

> Five of the best cash Isas for tax-free saving 

Zopa: Does Biscuit have any bite?

Zopa has doubled cashback on direct debits in its Biscuit current account from 2 per cent to 4 per cent.

The challenger bank has capped the payments it pays cashback on at £2,000 meaning the maximum you can earn in a year is £80.

There's a short amount of time to take up the deal, with the initial promotional window lasting until the end of May.

However the bank has said it will review this in June so an extension hasn't been ruled out.

Once you sign up you'll receive the enhanced cashback for 12 months.

Unlike most other banks that pay cashback, Zopa pays it on all your direct debits rather than select bills – so it's worth a look if you have a range of payments going out each month.

But Kate Steere of Finder says you'd need to switch direct debits to come out of this account to maximise the offer, rather than just using it for everyday spending.

Biscuit has other bonuses, such as paying 2 per cent interest on your current account balance with no cap.

Zopa also offers a regular saver paying 7.1 per cent interest for six months – you can stash a maximum of £300 a month away.

But again you should consider whether you'll make enough use of these extras when choosing an account.

A third option – Santander Edge and Edge Up

Santander pays 1 per cent cashback on its Edge and Edge Up current accounts.

The cashback cap on Edge is £10 a month while for Edge Up it's £15. Account fees are £3 and £5 respectively.

Keep in mind Santander only pays cashback on select household bills, but most major utilities suppliers should be included, as well as council tax.

'Santander looks especially tempting at the moment given they are still running a £180 switch offer, meaning you can bag some extra cash straight away,' said Kate Steere of Finder.

To get the £180 you need to switch using the Current Account Switch Service including at least two active selected direct debits. You also must pay in £1,500 within 60 days of requesting to switch.