How to choose the right current account for you

There’s a huge choice of current accounts available, so you'll want to pick the one that meets your needs best.

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If you’re always overdrawn, for example, there’s no point going for a current account which offers a great rate of interest when you’re in credit.

Similarly, if you never dip into the red it doesn’t make sense to opt for an account which has low overdraft fees but pays paltry returns when you’re in credit.

It’s easy to switch

If you're thinking that switching current accounts is going to be complicated, don't worry, the process has never been simpler.

September 16 marks the third year anniversary of the 7-Day Switch, when new rules were introduced to ensure that when you move accounts it won’t take longer than seven working days.

So here’s our round up of the best current accounts depending on your individual requirements.

If you’re always in the red

If you’re frequently overdrawn, your priority should be an account with low overdraft charges. (You can still switch your current account even if you're overdrawn, especially if you've used your overdraft sensibly and have a good credit rating.)

One of the top options is Nationwide’s FlexDirect account which offers a fee-free arranged overdraft for 12 months.

Try to use those 12 months to pay off as much of your overdraft as possible, as after this you’ll be charged a daily usage fee of 50p on arranged overdrafts of £10 or more.

If you only tend to go overdrawn by a small amount every so often, the First Direct 1st Account offers a £250 interest-free overdraft, although you'll be charged 15.9% EAR (variable) on arranged overdrafts above this. (Overdrafts are subject to status and approval.)

You'll also receive £100 cashback for switching to this account using the Current Account Switch Service, so long as you pay in £1,000 or more within the first three months of opening your account.

You'll also need to pay in £1,000 a month or have another product with First Direct, such as a mortgage, to avoid the £10 monthly fee on the account.

If you want high interest or cashback

If you always stay in credit, it makes sense to opt for a current account that pays a generous return.

With Nationwide’s FlexDirect current account, you’ll earn a fixed rate of 5.00% AER on balances up to £2,500 for the first year. But once the 12 months are up, the rate falls to 1.00% AER (variable).

You'll need to pay in at least £1,000 each month to qualify for this deal.

Plenty of current accounts pay generous returns if you stay in credit

Alternatively, TSB’s Classic Plus current account pays an ongoing rate of 5.00% AER (variable) on the first £2,000 – this means you don’t have to worry that the rate will drop after 12 months, although it is variable so it could change at any time.

You will need to pay in £500 a month and register for internet banking, paperless statements and paperless correspondence.

You'll also earn 5% cashback on your first £100 of contactless or Apple Pay payments every month until September 30, 2017 (or December 31, 2016 if you opened your account before June this year).

You could also consider an account that offers both cashback on your household bills and interest if you’re in credit.

Santander’s 123 current account, for example, pays a tiered rate of interest depending on the size of your account balance.

You’ll receive 1.00% AER (variable) if your balance is £1,000 or more, and 2.00% AER (variable) if you have £2,000 or more in your account. Balances of between £3,000 and £20,000 earn 3.00% AER (variable).

However, be aware that from November 1, 2016, the amount of interest you can earn will be cut to a single monthly interest rate of 1.50% AER (variable) on all balances up to £20,000. You can read more about this here.

In addition, you can earn 1% cashback on any Santander mortgage payments (up to £1,000 a month) that come out of your account, as well as on any water and council tax bills. Cashback on energy bills is 2%, rising to 3% on your mobile, home phone, broadband and paid-for TV packages.

To qualify for the 123 account, you'll need to pay at least £500 a month into the account and set up two direct debits. The account has a £5 monthly fee.

Alternatively, the NatWest Reward Account pays 3% cashback on seven household bills (council tax, mobile, landline, TV package, water, gas, electricity and broadband), so long as you pay them by direct debit from the account. There's no limit on the rewards you can earn, but there is a £3 monthly fee.

Meanwhile, the Halifax Reward account pays a flat £5 reward each month you pay in £750 or more, pay out two direct debits and stay in credit. You'll also get £125 for switching to the account, so long as you use the Current Account Switch Service and close your old account.

If you want good customer service

If customer service is your priority, a good way to find out if a bank treats its customers fairly is to conduct a quick straw poll among your friends.

If a few of them have had terrible service from a particular bank then warning bells should ring.

The good news is, certain banks have a long-standing reputation for great customer service, such as First Direct, which is often praised for its helpful telephone staff.

Others, such as Santander, winner of the ‘Best Loyalty Current Account Provider’ award in this year’s MoneySuperMarket Supers Awards, have seen a big improvement in their customer service in recent years.

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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.

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