Compare high interest current accounts

High interest current accounts

Some current accounts now offer much higher rates of interest than even the best-paying easy access savings accounts – and, of course, still offer immediate access to your money.

To qualify however, banks and building societies want you to use the account as your main current account. Usually this means funding the account with a minimum monthly payment and setting up some outgoing direct debits. 

Interest rates on current accounts used to be quoted before tax, with 20% automatically deducted before the interest landed in your account. However, since the introduction of the new Personal Savings Allowance (PSA) in April 2016, banks and building societies no longer deduct any tax, and instead pay interest gross.  The PSA means that basic-rate taxpayers can earn £1,000 of savings interest without the taxman taking a slice, and higher rate taxpayers can earn £500. Additional rate taxpayers are not eligible for a PSA. 

Rates on current accounts are variable, so bear in mind that they could change.

The Santander 123 account is great if you have a decent-sized chunk of savings to find a home for, as it pays 1.5% AER variable (annual equivalent rate) on your entire balance up to £20,000.

The 123 account also pays between 1% and 3% cashback on your household bills – and this includes your mortgage payment if it’s with Santander.

You’ll need to fund the 123 account with at least £500 a month, which is the equivalent of a £6,000 annual salary, and set up two outgoing direct debits. This account charges a monthly fee of £5.

Santander

 

Santander

123 Current Account

Interest rate (AER)

 

on balances between and

on balances up to

Monthly fee

annual fee No monthly fee

Customer service rating

Great (65%) Ok (29%) Poor (6%)

Customer service ratings provided by users of

  • Mobile App
  • Switching Service
  • Overdraft Facility
  • Cashback
2016 SUPERS

Winner of the Best 'Loyalty’ Current Account Provider


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TSB’s Classic Plus makes sense for savers with balances of around £1,500, as the account pays a very-decent AER of 3.00% variable on cash up to this amount.

You’ll need to service TSB’s Classic Plus account with at least £500 a month (equivalent to £6,000 annual salary) and register for online banking to benefit from the 3.00% interest. No interest is paid on any balance above £1,500.

TSB

TSB

Classic Plus Account

Interest rate (AER)

 

on balances between and

on balances up to

Monthly fee

annual fee No monthly fee

Customer service rating

Great (63%) Ok (30%) Poor (7%)

Customer service ratings provided by users of

  • Cashback
  • Direct Debits
  • Mobile App
  • Online Banking
Great for
  • 3% AER on balances up to £1,500
  • £5 cashback for 20 debit card payments per month and £5 cashback for two different direct debit payments per month. Valid from 1st March 2017. T&Cs apply, ends 30th June 2018
  • If you have a Plus account, earn up to £5 a month cashback with selected TSB credit cards (Representative 18.9% APR variable) . T&Cs apply. Ends 30th June 2018
But be aware that
  • To earn 3% AER (variable) on the Classic Plus Account, credit your account with a min of £500 each month, register for internet banking, paperless statements and correspondence
  • You can only get the monthly cashback if you opened your account on or after 1st March 2017, and if you register for internet banking. T&Cs apply. Offer ends 30th June 2018
  • To earn up to £5 per month credit card Cashback, you need an eligible credit card and the Cashback ends June 2018. Subject to Status and Lending Criteria. Must be 18+ and a UK resident
2016 SUPERS

Winner of the Best Overall Provider


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