High interest current accounts

Earn more on your current account. There’s no need to accept a low rate of interest on your current account so switch to a better deal today and get a higher return on your money…

High interest current accounts - Order based on in-credit rate (AER) in decending order

    • Provider/Product name FlexDirect

      FlexDirect

    • Interest Rate (AER) 5.00% on balances between £1 and £2500
    • Monthly Fee No monthly fee
    • Customer Service Rating
      Great
      67%
      OK
      26%
      Poor
      7%
    • Go to site

      Phone

      More details

    Market leading

    This is the best rate for balances up to £2,500

    Great for
    Great option for those with balances left at the end of the month
    Access to preferential rates and offers
    But be aware that
    Minimum monthly funding of £1,000
    After 12 months the interest rate lowers to 1% AER
    • Provider/Product name Classic Plus

      Classic Plus

    • Interest Rate (AER) 5.00% on balances up to £2000
    • Monthly Fee No monthly fee
    • Customer Service Rating
      Great
      37%
      OK
      43%
      Poor
      20%
    • Go to site

      Phone

      More details

    New

    This is the best interest rate for balances up to £2,000

    Great for
    In credit interest of 5% AER for balances from £0 – £2,000. T&C’s apply
    Available to new and existing customers
    But be aware that
    Subject to application and approval
    To earn 5% AER you must credit your account with £500 each month, register for internet banking, paperless statements and correspondence (if available)
  1. Market leading

    Best rate for balances between £3,000 and £20,000

    Great for
    Cash back on your household bills
    1% cash back on your Santander Mortgage
    But be aware that
    £2 monthly account fee
    Minimum monthly funding of £500
  2. Great for
    In credit interest : use for end of month balances or savings
    9.9% EAR Overdraft rate – great option for overdraft occasional users
    But be aware that
    Minimum monthly funding £1,000
    • Provider/Product name Coventry First

      Coventry First

    • Interest Rate (AER) 1.10% on balances up to £9999
    • Monthly Fee No monthly fee
    • Customer Service Rating Currently unrated
    • Sorry, we have no link

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      More details

    Great for
    £250 interest-free overdraft
    Rate includes a 0.85% bonus for 1st year
    But be aware that
    Rate includes a bonus, you may want to switch at the end of this period
  3. Up to £160 Cashback

    Great for
    Get up to £160 cashback in the first year - made up of £100 for switching an active bank account held elsewhere to Halifax. Your switch is covered by the Current Account Switch Guarantee
    and 12 monthly £5 reward payments - receive £5 each month that you pay in £750, pay out 2 Direct Debits and stay in credit
    But be aware that
    To qualify for £100, use the Current Account Switch Service to transfer all active monthly Direct Debits (min 2) and credits (min £750). Excludes customers who've had £100 for switching to a Halifax bank account since Jan 2012
    To open a Halifax Reward Current Account you need to set up at least 2 active Direct Debits and pay in every month (minimum £750)

    Representative Example:

    If you use a planned overdraft of £1,200, then Halifax will charge you £1 a day when you use it. Overdrafts are subject to status.

  4. £100 Cashback

    Great for
    £100 cashback for switching an active bank account held elsewhere to Halifax. Your switch is covered by the Current Account Switch Guarantee
    Account holders get worldwide family travel insurance, car breakdown cover, mobile cover and more, provided by selected third parties
    But be aware that
    To qualify for £100, use the Current Account Switch Service to transfer all active monthly Direct Debits (min 2) and credits (min £750). Excludes customers who've had £100 for switching to a Halifax bank account since Jan 2012
    £15 monthly fee. This is reduced to £10 in each calendar month you pay in £750 or more, pay out two different Direct Debits and stay in credit

    Representative Example:

    If you use a planned overdraft of £1,200, then Halifax charge you a daily fee of £1. For Ultimate Reward Current Accounts, you will pay the higher monthly account fee of £15 rather than £10 if you use your overdraft. This means there will be an additional indirect cost of £5 if you use a planned overdraft on this account. Overdrafts are subject to status.

High interest current accounts

What is a high-interest account?

Many of us don’t notice the interest we earn on money in our current accounts mainly because most pay virtually nothing on balances in credit – and some pay zero interest. However, there are a number of high-interest current accounts which are ideal if you always have money in your account and don’t go overdrawn.

Who do they suit?

High-interest bank accounts are great if you tend to keep a high balance in your account and as long as you never slip into the red. Many of the best deals require you to pay in a certain amount each month, often between £1,000 and £1,500 – so you need to be certain you will qualify for the account.

Benefits

The benefits are fairly clear – if you typically leave a balance in your current account then you could earn a decent rate of interest on it. In fact, some high-interest current accounts actually pay more than many savings accounts.

For example, if you leave an average balance of £1,000 in a high-interest bank account paying 5.00%, you’ll earn £50 a year in interest.

Some high-interest bank accounts will also offer a linked savings account and this may have a more competitive rate than you will find elsewhere, although you should not take that for granted – it’s still worth comparing savings accounts to check you have the best deal.

Other high-interest savings accounts may offer a cash switching incentive.

Negatives

In many cases the high rate of interest only applies on balances up to a certain level – often £2,500. Above this amount, the rate tends to drop to 0.1%. There are a couple of exceptions so it’s well worth checking all the product details before you apply.

It’s also important to note that the high interest rates are usually introductory offers and the rate is likely to drop after 12 months. With so few people switching their current accounts regularly, banks and building societies know that they will usually keep your custom even once the high introductory rate has ended.

As already mentioned, an increasing number of current accounts require customers to pay in a minimum amount each month and this is usually the case with high-interest current accounts. What’s more, the money you deposit may have to be your salary.

High-interest current accounts are aimed at those who run their accounts in credit. If you have a tendency to go overdrawn, you will probably be better off with a different account as the overdraft rates tend noy to be the most competitive.

Alternatives

If you are looking for somewhere more long-term to keep your savings, a high interest current account may not be the best option. An Individual Savings Account (ISA) is always a good place to begin saving as the interest you earn isn’t taxed, so consider investing into a cash ISA first. You can invest up to £5,760 in a cash ISA before the current tax year ends on 5 April 2014.

You can usually secure a high rate of interest by agreeing to lock your money away for a fixed period, or you can use an easy access account if you want to be able to get at your cash immediately.

High interest current accounts

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