This week's best current accounts

Published by Edmund Greaves on 08 May 2013.
Last updated on 18 June 2018

When it comes to our day-to-day banking, many of us overlook how important it is to have a current account that suits our needs.

Interest rates on savings accounts are so low that more people are turning to their current accounts to grow their cash. Many other providers offer attractive bonuses to tempt you into switching.

If your balance regularly dips into the red then it is better to opt for an account that offers cheap overdraft borrowing.

Each week we highlight our Moneywise Best Buys, which pick out the best products the current account market has to offer.

Best high interest current accounts

Nationwide FlexDirect
5% interest on balances up to £2,500

The 5% interest rate is an introductory 12 month offer - when it ends the rate drops to just 1%. Agreed overdrafts are free for the first year but you’ll need to pay in at least £1,000 a month. 

TSB Classic Plus
5% interest on balances up to £1,500

You’ll need to pay in at least £500 a month, register for internet banking, opt-in for online bank statements and paperless correspondence to get this headline rate.

New customers also earn £5 cashback every month for having two direct debits plus another £5 cashback if you spend with your debit card 20 times a month. This cashback offer runs until 30 June 2018.

Tesco Bank Current Account
3% interest on balances up to £3,000

The supermarket giant pays 3% interest on balances up to £3,000 and has guaranteed to maintain this rate of interest until 1 April 2019. It also rewards debit card spending with Clubcard points.

You earn one point for every £1 spent in Tesco, plus one point for every £8 spent elsewhere. For new customers this account also has a £750 minimum pay-in and requires three direct debits to be set up.

Bank of Scotland Vantage
2% interest on balances up to £5,000

Holders must pay £1,000 into the account each month, stay in credit and pay out at least two direct debits. To access this interest rate you must open a standard current account with the bank and request its Vantage add-on. 

Lloyds Bank Club Lloyds
2% interest on balances up to £5,000

To earn this rate of interest you must pay £1,500 into the account every month and have two direct debits set up. Account holders can also get extra benefits such as six cinema tickets, an annual magazine subscription or annual Gourmet Society membership.

Santander 123 Current Account
1.5% interest on balances up to £20,000

This account comes with a £5 monthly fee, but also very generous cashback on household and utility bills.

This has a smaller interest rate than the other accounts listed but you can save up to £20,000, meaning it is better for those with lots of cash. This requires £500 monthly minimum pay-in and two active direct debits.

Best current account switching bonus

First Direct 1st Account 
Free gifts worth potentially £100s, £100 if you leave within six months

First Direct will offer you an assortment of valuable gifts such as online course, electronics or Expedia vouchers if you switch to one of its current accounts. It will also pay you another £100 if you are unhappy with the service and leave after the first six months.

To qualify, you’ll need to transfer via the Current Account Switching service, transfer your direct debits and deposit at least £1,000 in the first three months. Read our full breakdown of the new offer form the bank.

HSBC Advance
£150 to switch, and £50 if you stay for 12 months - available until 30 June 2018

Switch to and HSBC Advance current account to get £150 up front anf a further £50 if you stay for 12 months. Must apply before 30 June to obtain the offer. To be eligible for the extra £50, new customers will need to log into mobile or online banking within 60 days of opening the account.

This offer is open to new customers opening up an HSBC Advance account. It requires no monthly fees and offers an interest-free and fee-free overdraft for the first six months. The arranged overdraft will be a minimum of £1,000 upon opening.  

However, there is a significant caveat to opening up an HSBC Advance account: customers must pay in at least £1,750 a month, or £10,500 over six months. If this condition is not met, the account will be downgraded to a standard bank account.

NatWest Reward
£100 to switch - before 15 June

NatWest have a limited time switching offer of £100 cash if you switch your current account before 15 June. You'll need to pay in £1,500 and log in to online or mobile banking  by 13 July to get the cash, which you should receive by 10 August. 

NatWest has a selection of current accounts to choose from when you switch. Its Select Account is a no monthly fees no frills banking option with typical services such as online banking and contactless debit card.

Its Reward account meanwhile has a monthly fee of £2 and pays 2% cashback on certain household bills and 1% cashback on spending at NatWest’s retail partners. The bank also offers Reward Silver and Reward Platinum accounts for £12 and £19 per month respectively. Both come with mobile phone insurance and 2% cashback on certain household bills. In addition, the Silver account includes European travel insurance while the Platinum account offers worldwide cover. The Platinum account also offers UK car breakdown cover.

Barclays Blue Rewards
Up to £384 over 12 months

Double cashback rewards for 12 months if you switch before 29 June. If you’re not a customer currently and switch your account before 29 June, you’ll get your rewards doubled. So, for example, instead of the normal £7 cashback reward for having a direct debit, you’ll earn £14 a month. If you have other financial products with Barclays such as a mortgage, home insurance or a loan, you will earn extra cashback on top – up to a total of £32 a month or £384 a year. You will also earn 1% cashback at a selection of more than 150 retailers.

In order to redeem the rewards, you’ll need to pay at least £800 a month into the account and pay the £3 monthly fee. 

Halifax Reward
£75 to switch

Halifax will pay anyone who switches to its current account a £75 bonus, plus a £3 reward each month you pay in £750 or more, pay out at least 2 different direct debits and stay in credit.

The same reward is also available on its Ultimate Reward account. That charges a £12 monthly fee, or £15 if you pay in less than £750 per month.

M&S Bank Current Account
£125 M&S gift voucher to switch, plus £5 a month for a year

M&S Bank gives a £125 voucher to new current account switchers, plus a £5 voucher each month for a year, providing you pay in at least £1,000 a month. The deal is also available on the £10-a-month M&S Bank Premium Current Account.

Best authorised overdrafts

First Direct 1st Account
£250 interest free overdraft 

If you regularly go overdrawn, a healthy £250 interest-free overdraft is offered by First Direct. Anything above this is charged at 15.9%.

M&S Bank Current Account
£100 interest free overdraft

This account has an £100 interest-free overdraft. Go further into the red and you’ll be charged at 15.9%.

Best current account for customer service

Picking the right bank isn’t just about getting the highest interest rate, or lowest overdraft fees. Service is equally important. That’s why the Moneywise Customer Service Awards look at the companies readers trust the most each year.

Almost 50,000 readers voted in the 2017 Awards, with First Direct being crowned the most trusted current account provider in the UK. Readers scored it 4.92/5 for trust, narrowly beating Metro Bank, which scored 4.89/5.

Nationwide, The Co-operative Bank and TSB completed the top five.

How are Moneywise Best Buys selected?

We look across as much of the market as possible to find the best deals using industry data from Defaqto.

All our picks are nationally available - online, by post or by phone. We try and pick products that are available to both new and existing customers, but we’ll highlight some offers for existing customers if they’re much better than what else is on offer.

We select the products which offer the highest interest rate, best introductory bonus and best overdrafts, taking into account any monthly fee. 

We reserve the right to use our discretion at all times.