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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
Top current accounts for savers Nationwide FlexDirect 5% on £2,500 fixed for a year TSB Classic Plus 3% on £1,500 
Using high-interest current accounts to boost your savings How to make the most of high-interest current accounts

Top current accounts for savers

High street banks are paying current account customers as much as 5% credit interest -  better than most savings accounts - and you can open a bank account online in a matter of minutes. 

Our table shows the best deals for credit balances of £1,000 (click 'more info' to find out how to qualify for interest on the accounts) and if you want to maximise returns, read our step-by-step guide to opening multiple high-interest bank accounts below.

Provider Account
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Interest
rate

Min funding

per month

Perks

Recommended provider

Nationwide

 

More info

Pays 5% up to £2,500 for the first 12 months (rate falls to 1% thereafter) as long as you pay in £1,000/mth. Max two accounts per person (one must be joint). Nationwide customers can 'Refer a friend' to earn £100.

FlexDirect 78% 5% £1,000

Fee-free overdraft for a year

TSB

 

More info

Pays 3% 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). 

Classic Plus 65% 3% £500 Promises to refund all innocent victims of fraud. Read more about this here.
Bank of Scotland

 

More info

As of 1 Oct '19, Vantage pays 1% AER under £3,999.99, and 2% from £4,000 to £5,000. Previously paid 1.5% on balances up to £5,000. 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 with Vantage 64% 1% £1,000  
Lloyds Bank

 

More info

As of 1 Oct '19, Club pays 1% AER under £3,999.99, and 2% from £4,000 to £5,000.  Previously paid 1.5% on balances up to £5,000. 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 69% 1% £1,500

Free annual gift (6 Vue/Cineworld cinema tickets, or mag subscription, or Gourmet Society membership)

Santander 

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 70% 1.5% £500 1% to 3% cashback on bills paid by direct debit including Santander mortgages
Tesco Bank

 

More info

1% on balances up to £3,000,  Must pay in £750/mth and pay out three direct debits. Max two accounts per person.

Current Account 60% 1% £750 Two Clubcard points per £1 spent on debit card at Tesco in addition to normal Clubcard points

Recommended provider

Starling Bank

 

More info

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

Personal Account 83% 0.5% £0 No card fees abroad
Clydesdale Bank

 

More info

0.5% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

B Account 67% 0.5% £0 Linked savings account pays 1%
Yorkshire Bank

 

More info

0.5% paid on balances up to £2,000. Managed via a mobile banking app. Max two accounts (one must be joint).

B Account 67% 0.5% £0 Linked savings account pays 1%

 

Data correct at September 2019

Which? Customer Score: Our 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 4,216 members of the general public in September 2019. Our full table includes scores and star ratings for all banks. 

 

Nationwide FlexDirect 5% on £2,500 fixed for a year

While Lloyds and Santander have been cutting interest rates on their flagship current accounts, Nationwide has maintained a rate of 5% on balances up to £2,500 for its FlexDirect customers. 

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. 

Some benefits have been pulled - in April 2019, Nationwide withdrew its Flex Regular Online Saver which paid 5% on regular payments of up to £250 a month for a year. 

But, Nationwide is near the very top of our customer satisfaction tables year after year, as rated by members of the public who hold a current account with the building society.

It's a Recommended Provider once again, following our banking survey in September 2019. 

Find out more: Best and worst banks rated by customers

 

TSB Classic Plus 3% on £1,500 

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

This has since fallen back to 3% (from July 2019) but 3% on a maximum balance of £1,500 would still net you £45 in interest a year. 

The minimum monthly pay-in is only £500 (other banks ask you to pay in £1,500 every month) and there's no requirement to maintain a minimum number of direct debits but you will need to register for internet banking and paperless statements.

Using high-interest current accounts 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.

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 £50 for switching plus an ongoing £2 for any month you pay in £750, pay out two different direct debits and remain 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 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.

Find out more: Direct debits and standing orders - which is better for regular payments?

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