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First Direct scraps £10 current account fee: can you benefit?

If you earn less than £12,460 you’ll now be able to use the account for free

applying for a First Direct account

First Direct will scrap the £10 fee on its 1st Account for new and existing customers from 14 September, meaning those with a gross income of less than £12,460 will be able to use the account for free.

Currently, the £10 charge applies to existing customers that don’t pay in at least £1,000 a month; hold an average balance of £1,000 a month; or have a First Direct savings account, mortgage, credit card, loan or home insurance. New customers have six months to meet the criteria to avoid the fee.

First Direct is a Which? Recommended Provider and the 1st  Account is rated very highly by Which? customers, getting a score of 85% in our latest satisfaction survey. It offers a £250 fee-free overdraft and is well known for its great customer service.

When the fee is scrapped First Direct will join a range of providers that don’t have a minimum monthly funding requirement on their main current account to unlock everyday benefits.

But it’s a sparse list. Here, we take a look at the best accounts to suit your monthly income.


Can you afford the best current accounts?

Most providers will ask you to deposit a set amount each month known as the minimum monthly payment to qualify for its best current accounts and unlock all the perks.

The money you pay in can come from one or a variety of sources including wages, benefits, savings interest and/or a pension.

If you can’t meet the funding requirement you could lose out on certain benefits, such as in-credit interest or cashback. In some cases, a provider may not allow you to continue using the account or hit you with a fee.

However, it can be tough to meet the minimum funding requirement criteria if your income is irregular or you just don’t generate enough through your work or pension.

The average gross income in the UK according to the Office for National Statistics (ONS) is £29,832 a year, but that figure varies depending on your age and whether you are a full-time or part-time worker.

For example, people aged 18 to 21 earn an average of £10,937 a year when in full-time work or £6,245 when in part-time work.

While some current accounts don’t come with a minimum monthly payment requirement others can require as much as £1,750 equivalent to a gross annual income of £25,683 (£25,663 in Scotland).

So your income could mean you are excluded from some of the top accounts and the benefits they offer.

Best current accounts to suit your income

You can use our table below to find out which accounts you qualify for based on your income.

We’ve taken the minimum monthly payment required on leading high-interest and cashback accounts and found out how much you would need to earn from your employment before tax to qualify for it.

We’ve ordered the table from the lowest minimum monthly payment to highest, but you can change the criteria by clicking the headings.

Monzo, Starling Bank, Clydesdale Bank and Yorkshire Bank don’t set a minimum monthly funding target – great if you don’t know how much you will be paid from month to month or earn a modest amount.

M&S Bank and First Direct (from 14 September) also don’t have a minimum funding requirement but you will need to meet some criteria in order to qualify for their switching bonus offers.

Once you’ve figured out which bank account could work for you it’s worth checking out how they’ve been rated by customers. Find out more in the best and worst banks.

How to switch your current account

If you’re finding you can’t fund your account with enough money to unlock the benefits it’s worth switching to a more flexible account with perks you have a chance of getting.

Most banks have signed up to the Current Account Switch Service (CASS) which allows you to switch your bank account in just seven working days.

Your new bank will take care of moving your standing orders and direct debits, but you will need to update your details with some companies like Spotify and Netflix as this won’t be automatically switched.

Find out more about how to switch in our guide or watch the video below.

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