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Best high interest bank accounts

Not sure which current account would suit you best? We've made it easier for you by selecting the best high-interest current accounts.

In this article
Best high-interest current accounts  Lloyds to cut rates from July 2018 Nationwide FlexDirect pays 5% for a year Why high-interest current accounts can boost your savings
How to make the most of high-interest current accounts How we choose our Best Rate bank 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 Account
name
undefined

 

 

Interest
rate
Switching
bonuses
and perks
Minimum
funding
per month

Recommended provider

undefinedNationwide Building Society

 

More info

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).

FlexDirect 76% 5% Refer a friend and share
£200. Fee-free overdraft
for first 12 months.
£1,000
undefinedTSB

 

More info

5% on balances up to £1,500, as long as you pay in £500/mth and register for internet banking/paperless statements. Max two accounts (one must be joint). 

Plus
Account
72% 5% None. £500
undefinedTesco Bank

 

More info

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.

Current
Account
68% 3% Earn one Clubcard point
per £1 spent on debit
card at Tesco in addition
to normal Clubcard points.
£750
undefinedBank of Scotland

 

More info

1.5% on balances up to £5,000 (reduced from 2% on 1 July 2018). 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.

Classic
Vantage
67% 1.5% None. £1,000
undefinedLloyds Bank

 

More info

1.5% on balances up to £5,000 (reduced from 2% on 1 July 2018). Must pay out two direct debits. Monthly fee of £3 applies in any month you don't pay in £1,500. Max two accounts (one must be joint).

Club
Account
66% 1.5% Choose free annual
benefit (6 Vue or Cineworld
tickets, mag subscription,
or Gourmet Society
membership).
£1,500
undefinedSantander

 

More info

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).

123 65% 1.5% Up to 3% cashback on
household bills
 paid by
direct debit, including
Santander mortgage
payments.
£500
undefinedStarling Bank

 

More info

Only operated by mobile banking app. 0.5% AER on balances up to £2,000 and 0.25% on balances above £2,000 up to £85,000.

Personal
Account
N/A 0.5% Fee-free card spending
and cash withdrawals
abroad.
£0
undefinedClydesdale Bank

 

More info

0.25% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

B
Account
67% 0.25% Linked savings account
pays 0.5%
£0
undefinedYorkshire Bank

 

More info

0.25% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

B
Account
68% 0.25% Linked savings account
pays 0.5%
£0

 

Table last updated on 5 July 2018.

Which? Customer Score: Which?'s rating for customer satisfaction, based on feedback from real customers. The score is made up of a customer's overall satisfaction with the brand, and how likely they are to recommend that brand to a friend. We surveyed 5,023 members of the general public in March 2018.

Lloyds to cut rates from July 2018

Lloyds Banking Group announced it will cut interest rates on its most popular current accounts again - from 2% to 1.5% on balances between £1 and £5,000 for customers with Club Lloyds and Bank of Scotland Vantage accounts. 

Club customers already saw the top rate halved from 4% to 2% in January 2017. And Santander halved the top rate on its flagship 123 account in November 2016.

Meanwhile, TSB has bumped up the rate on its ClassicPlus account from 3% to 5% on balances up to £1,500, by way of an apology for its recent online banking meltdown.

Nationwide FlexDirect pays 5% for a year

In contrast to Lloyds and Santander, Nationwide has kept the FlexDirect interest rate at 5% on balances up to £2,500.

This rate is fixed for the first 12 months of holding the account, as long as you pay in at least £1,000 per  month (excluding transfers from any Nationwide account held by you or anyone else). 

After a year, the rate drops to 1% on balances up to £2,500. 

FlexDirect customers can also apply for the Flex Regular Online Saver, earning 5% on regular payments of up to £250 a month for a year. 

Nationwide is second only to First Direct in our customer satisfaction tables, with a score of 76%, rated by members of the public who hold an account with the building society. 

Find out more: Best and worst banks rated by customers

Why high-interest current accounts can 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.

How to make the most of high-interest current accounts

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 

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 £75 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 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.  

The accounts must also be available nationally and 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. 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.

We surveyed 5,023 members of the general public in March 2018.