Best bank accounts
Best bank accounts if you always stay in credit
By Chiara Cavaglieri
Article 1 of 6
Best bank accounts if you always stay in credit
Not sure which current account would suit you best? We've made it easier for you by selecting the best high-interest current accounts.
High-interest current accounts
Current accounts are paying much better rates than most savings accounts at the moment. Our table shows the best deals for credit balances of £1,000.
If you want to maximise returns, read our step-by-step guide to opening multiple high-interest bank accounts below.
|Provider||Interest rate (AER)||Switching incentives and perks||Min. monthly funding||Customer score customer score help|
|5% a||Recommend a friend and share £200 / fee-free overdraft for first 12 months||£1,000||
|3% b||5% cashback on first £100 of contactless spending||£500 c||71%|
|3% d||Tesco Bank is not currently accepting applications||None||66%|
|2% f||Choose free annual benefit (6 Vue or Cineworld tickets, mag subscription, or Gourmet Society membership)||£1,500 g||59%|
|Up to 3% cashback on household bills paid by direct debit, including Santander mortgage payments||£500||62%|
|0.25% i||Linked savings account pays 0.75% (falls to 0.5% May 2017)||None||69%|
|0.25% i||Linked savings account pays 0.75% (falls to 0.5% May 2017)||None||68%|
This table is updated on a daily basis.
a 5% paid on balances up to £2,500 for the first 12 months (1% thereafter). Max two accounts (one must be joint).
b 3% paid on balances up to £1,500. Max two accounts (one must be joint).
c To earn 3% you must credit your current account with £500 each month and register for internet banking, paperless statements and correspondence. Max two accounts (one must be joint).
d Rate of 3% on balances up to £3,000 guaranteed from 1 April 2017 to 1 April 2019. Max two accounts.
e Interest paid at 1.5% on balances from £1; 2% from £1,000; 3% from £3,000; 0% above £5,000. Vantage rate drops to 2% on balances from £1-£5,000 from 11 June 2017. Max three accounts.
f 2% paid on balances up to £5,000. Max two accounts (one must be joint).
g £3 monthly account fee in any month you don't pay in £1,500.
h 1.5% paid on your entire balance up to £20,000. Account costs £5 per month. Also pays up to 3% cashback on household bills paid by direct debit (including Santander mortgage). Max two accounts (one must be joint).
i 0.25% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).
General public score based on customer satisfaction and likelihood of recommending company to friend/family member. Customer scores are based at brand level.
Customer scores are based on a survey of an online panel of respondents from the general public, who were invited to take part in the bank account customer-satisfaction survey during September 2016. The final sample size was 4,918.
Back to customer score in money table
Play the high-interest current account game to boost your savings
Given the poor rates of interest offered on savings accounts, many savers are opening multiple high-interest current accounts to maximise their returns.
The drawback with this type of account is that banks apply restrictions, such as minimum monthly payments. However, we explain how you can work within these rules to beat the limits and make the most of your cash savings:
Our example applies to a saver with £4,000 available to leave in high-interest current accounts and a further £1,000 to circulate between them.
Step 1: Find highest current account interest rates
Our table above shows you the best rates available on current accounts, along with the number of accounts you can open.
Step 2: Check the high-interest account requirements
Banks often set specific account requirements – such as fees, minimum monthly deposits and direct debits – to qualify for interest or to avoid paying a monthly fee on the account.
Each account limits the balance on which you can earn interest but, in most cases, banks will allow you to open a second main or joint account, essentially doubling that amount.
Watch out for accounts with tiered interest (where you get a higher rate for having a higher balance) as you must have a balance within the top tier to earn the top rate of interest. At lower tiers, these accounts become less competitive.
Step 3: Earn instant cash for switching to a high-interest current account
Banks often offer cash incentives to attract new customers – we compile the latest current account switching incentives here – and switching should only take seven working days.
In this example, we open the Halifax Reward account, which pays £75 for switching plus an ongoing £3 for any month you stay in credit.
Start with £1,000 in this account that will be used to circulate around your high-interest current accounts and return to the same account each month.
Step 4: Open multiple high-interest current accounts
Let's imagine you have a further £4,000 to play with. You could put £2,500 in a Nationwide FlexDirect account (earning £125 in the first year) and another £1,500 in a TSB Plus Account (earning £45 per year) .
If you have more available to save, look further down our table.
For example, the Santander 123 account is the only one paying interest on balances up to £20,000, as well as up to 3% cashback on bills paid by direct debit from your 123 account. If you could deposit the full £20,000, you'd earn £300 a year (£240 after the £5 monthly fee).
Step 5: Transfer cash from your main current account
Transfer the £1,000 from your Halifax Reward account into your Nationwide FlexDirect account so that you meet the minimum £1,000 deposit each month.
At this point, your Nationwide FlexDirect balance will stand at £3,500.
Step 6: Circulate it between your other high-interest current accounts
Now, transfer that £1,000 from your Nationwide FlexDirect account to your TSB Plus account (the minimum monthly deposit on TSB's Plus account is £500 a month).
The balance on your TSB account will now stand at £2,500.
Step 7: Transfer it back to your main current account
Finally, transfer £1,000 from your TSB Plus account back into your main Halifax Reward account.
Step 8: Repeat steps 5 to 7 each month
The easiest way to do this is to set up standing orders (instructions to your bank to pay a set amount at regular intervals to another account) so that the transfers take place automatically every month.
This means you meet the requirements of all the accounts and earn the most interest possible on the whole sum.
How we choose our Best Rate bank accounts
Which? Best Rate current accounts offer the best rates on the market for the scenarios we've used. They also have to meet the following conditions:
- The accounts must be available nationally
- The account provider must be fully covered by the Financial Services Compensation Scheme
We analyse the whole market and calculate the cost of the account so you can see how much you're likely to pay or how much interest you'll earn if you choose that account.
You can find out how we rate companies by visiting our Which? Recommended Providers.
- Last updated: March 2017
- Updated by: Chiara Cavaglieri