But in-credit interest and cheap borrowing from your bank are not the only reasons to switch to a better current account. Here are the top 5 hidden current account gems which you could be missing…
1. A lump sum for switching - but hurry to get max £125!
The quickest way to make money from your current account is to pick one that offers a cashback switching incentive which is paid directly into your new account.
Until Thursday (that's 31 July) First Direct is giving all new customers who switch to its 1st account via MoneySuperMarket a £125 thank you - so act now as there's no time to lose! After this date, the cashback offering reduces to £100.
Neither provider offers interest on credit balances, but this still makes them a great deal for the first year.
The Halifax Reward Current Account is also offering £100 cashback to switchers – so long as they use the dedicated Current Account Switch Service. If you want to qualify for the £5 monthly reward you will need to fund the account with at least £750 a month and have two outgoing monthly direct debits.
The £5 monthly reward (that’s £60 over the course of a year) is only paid if you are always in credit.
But you don’t have to meet these criteria to pocket the £100, as the bank has just extended the cashback offer to its Standard Current Account which doesn’t come with these requirements.
You will still have to use the Current Account Switch Service however, which means closing down your existing main bank account down completely.
2. Ongoing cashback...
But you don’t need to have all your cashback upfront – you can earn it as you spend. NatWest and RBS for example, have recently improved their Cashback Plus scheme which is available across its whole range of Select current accounts.
Up until December 31, you can earn1% cashback for EVERY contactless purchase at ANY retailer that accepts contactless for payments.
And if you make the contactless purchase at one of the existing Cashback Plus retailers (which include BP and Caffè Nero) you will earn an extra 1% on top of that too.
You’ll have to sign up to Cashback Plus (and, obviously, have a contactless card) to qualify. And you won’t earn interest on credit balances. But if this suits the way you spend, it’s certainly a gem worth knowing about.
Other current accounts which pay ongoing cashback include the Bank of Scotland Classic Account which lets you earn up to 15% cashback on debit card purchases at a given number of retailers which you are able to choose from. Keep on top of it though as these change from week to week. At the time of writing, you could get 10% cashback at Morrison’s for example.
Bank of Scotland’s It’s On Us feature also acts like a lottery by reimbursing you for one debit card purchase every month – but it's worth knowing about as this can be up to £500! However, all these perks mean you won’t earn interest on credit balances.
Then there’s the Santander 123 Current Account which pays between 1% and 3% cashback but only on household bills (which includes any Santander mortgage).
The 123 account comes with a £2 monthly fee but it also pays 3% interest on balances between £3,000 and £20,000, which is great for those who keep their savings stashed in their current account.
3. ...or rewards!
Rewards, as well as cash, are on offer too from current account providers vying for your custom.
Switch to the M&S Current Account, for example, using the Current Account Switch Service, and you’ll get a £100 M&S gift card, as well as the chance to earn one M&S point (worth 1p) on every £1 spent using your debit card.
And if you are prepared to pay £10 a month for the M&S Premium Current Account then you can add this £100 gift card to the £50 card you receive as standard, plus the M&S vouchers worth £212 that you’ll also get every year.
While there is a £100 fee-free overdraft buffer, you won’t get any in-credit interest on these accounts.
4. REAL banking convenience
For some people, being able to check balances, make payments and transfer cash between accounts on the go is more important than earning interest or qualifying for a low overdraft rate.
The mobile banking app from RBS/NatWest certainly delivers on this score – even allowing users to find their nearest cash machine and top up their mobile credit if need be.
The banks’ Select, Select Silver, Select Platinum and Black accounts also offer an emergency cash service that can be used if your debit card is lost or stolen.
Other banks offering high-level mobile banking services include Lloyds which has recently updated the services available via its app, used by millions of its customers.
Features include payments to both new and existing payees and full transaction histories for both current and savings accounts.
Lloyds also offers a range of current accounts, including the Club Lloyds Current Account that pays 4% on balances of between £4,000 and £5,000, but costs £5 a month if you fail to pay in at least £1,500.
5. Never-ending travel insurance
Nationwide’s FlexDirect account gets a lot of attention due to paying in-credit interest of 5% on balances up to £2,500. However, the UK’s biggest building society also has other, packaged accounts offering attractive benefits.
Its FlexAccount, for example, is free of charge as long as you pay in at least £750 a month – and comes with free annual European travel insurance.
Its FlexPlus account costs £10 a month, but comes with worldwide travel insurance for the whole family, worldwide mobile phone insurance and commission-free overseas cash withdrawals – making it a great choice for frequent travellers.
There’s no in-credit interest paid to FlexAccount customers but FlexPlus offers 3% on balances between £0 and £2,500.
NatWest and RBS Select accounts also offer European travel insurance to its Silver customers, worldwide travel cover for Platinum accounts holders and a 24/7 concierge service for Black customers.
Please note: any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.