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Best bank accounts

Best bank accounts if you always stay in credit

By Chiara Cavaglieri

Article 1 of 6

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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.

Best 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

Click the 'more info' button to find out how to qualify for interest on the accounts.

Provider Interest rate (AER) Switching incentives and perks Min. monthly funding Customer score customer score help


FlexDirect

5% Refer a friend and share £200 / fee-free overdraft for first 12 months £1,000

Which? recommended provider

77%

5% on balances up to £2,500 for the first 12 months (rate falls to 1% thereafter). Must pay in £1,000/mth. Max two accounts (one must be joint).
Tsb
Plus Account
3% 5% cashback on first £100 of contactless spending £500 67%
3% on balances up to £1,500. Must pay in £500/mth and register for internet banking/paperless statements. Max two accounts (one must be joint).

Current Account
3% Earn one Clubcard point per £1 spent on debit card at Tesco in addition to normal Clubcard points £750

Which? recommended provider

70%

3% on balances up to £3,000, guaranteed until April 2019. Must pay in £750/mth and pay out three direct debits. Max two accounts per person.
Bank of Scotland
Classic Vantage
2%   £1,000 62%
Vantage must be added to your account. Must pay in £1,000/mth, stay in credit and pay out two direct debits.Max three accounts per person.

Club Account

2% Choose free annual benefit (6 Vue or Cineworld tickets, mag subscription, or Gourmet Society membership) £1,500 62%
2% on balances up to £5,000. £3 monthly account fee applies in any month you don't pay in £1,500. Max two accounts (one must be joint).

123

1.5%

 

Up to 3% cashback on household bills paid by direct debit, including Santander mortgage payments £500 62%
1.5% on your entire balance up to £20,000. Must pay in £500/mth, pay out two direct debits, and cover the monthly fee of £5. Max two accounts (one must be joint).

B Current

0.25% Linked savings account pays 0.5% None 60%
0.25% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

Yorkshire Bank

B Current

0.25% Linked savings account pays 0.5% None 62%
0.25% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

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:

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. The table is updated daily.

The customer score is 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 March 2017. The final sample size was 5,041.

  • Last updated: May 2017
  • Updated by: Chiara Cavaglieri
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