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
      69%
      OK
      25%
      Poor
      6%
    • Go to site

      Phone

      More details

    Market leading

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

    Great for
    Highly commended provider 2014 Moneysupermarket.com Supers Awards
    Dedicated switching service to personally manage your account opening
    But be aware that
    Minimum monthly funding of £1,000
    After 12 months the interest rate lowers to 1% AER
  1. Great for
    Earn up to 4% AER / 3.93% Gross variable interest on your balance up to £5,000
    Get exclusive access to a range of great banking offers
    But be aware that
    For the monthly £5 fee to be waived, a minimum of £1,500 must be paid into your account each month
    To qualify for credit interest you need to pay two different Direct Debits from your Club Lloyds current account each calendar month

    Representative Example:

    Up to £100 interest and fee free overdraft, subject to application and approval. If you use a Planned Overdraft of £1,200 on the Club Lloyds Account the overdraft interest rate Lloyds charge on the first £100 will be 0% EAR variable. The overdraft interest rate on the next £1,100 will be 19.94% EAR variable and a Monthly Overdraft Usage Fee of £6 will apply. You will not pay any fees or interest on an unplanned overdraft if you are overdrawn by £10 or less. EAR is the Equivalent Annual Rate. This is the actual annual rate of an overdraft. It doesn't take into account other fees and charges.

  2. Great for
    Earn 3.00% AER/2.96% Gross variable credit interest on balances up to £3,000
    Collect extra Clubcard points in and out of Tesco with your debit card1
    But be aware that
    £5 monthly account fee - which you don’t pay if you deposit £750 a month

    Representative Example:

    If you use an arranged overdraft limit of £1,200 at a rate of 18.90% EAR (variable) interest, you would be expected to pay £0.62 interest each day.
    1 One point for every £4 spent in Tesco and one point for every £8 spent out of Tesco in each card purchase transaction. Exclusions apply.

  3. Market leading

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

    Great for
    Cashback on your household bills
    1% cashback on your Santander Mortgage
    But be aware that
    £2 monthly account fee
    Minimum monthly funding of £500
  4. 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

      Phone

      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
  5. Up to £160 reward

    Great for
    Earn up to £160 reward in the first year - made up of £100 for switching. Your switch is covered by the Current Account Switch Guarantee
    and 12 x £5 reward each month you pay in £750+, pay two different Direct Debits and stay in credit
    But be aware that
    To qualify for £100, use the Current Account Switch Service to transfer and close your old account held elsewhere. Excludes anyone who's had £100 for switching since Jan 2012
    Account terms and conditions apply
  6. £100 reward

    Great for
    £100 reward for switching. Your switch is covered by the Current Account Switch Guarantee
    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 and close your old account held elsewhere. Excludes anyone who's had £100 for switching 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

Close

Cookie use

MoneySupermarket uses cookies, small text files which are downloaded to your computer's hard drive when you visit most websites.

Read more

Cookies are harmless files which can help improve the experience. Cookies allow websites to respond to you as an individual. The website can tailor its operations to your needs, likes and dislikes by gathering and remembering information about your preferences.

Read less | Cookie Policy

Close