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.
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
2% interest on balances up to £1,500
The 2% interest rate is an introductory 12 month offer - when it ends the rate drops to just 0.25%. Agreed overdrafts are free for the first year but you’ll need to pay in at least £1,000 a month.
Bank of Scotland Vantage
2% interest on balances from £4,000 to £5,000
Holders must pay £1,500 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. 1% interest on balances up to £3,999. 2% interest on balances from £4,000 to £5,000.
Lloyds Bank Club Current Account
2% interest on balances up to £5,000
The Club Lloyds current account from Lloyds Bank pays 1% interest on balances up to £3,999 and 2% on balances from £4,000 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. Other benefits include free cinema tickets and digital movie rentals.
Account holders can also earn up to 15% cashback on debit purchases.
TSB Classic Plus
1.5% 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.
Virgin Current Account
2.02% interest on balances up to £1,000
This Virgin account comes with an interest rate of 2.02% up to £1,000.
Santander 123 Current Account
Up to 3% cashback on selected household bills
This account comes with a £1 monthly fee, but also very generous cashback of up to 3% on household and utility bills.
- 1% cashback on water bills, council tax and Santander mortgages
- 2% cashback on gas and electricity bills and Santander home insurance and life protection
- 3% cashback on phone and broadband bills
This requires £500 monthly minimum pay-in and two active direct debits.
Best current account switching bonus
The banks have now pulled their switching bonuses for current accounts. First Direct says it is currently focusing on existing customers and hopes this is only a temporary measure.
Best authorised overdrafts
During the coronavirus crisis banks are offering interest free overdrafts of £500 for customers in financial difficulty. This interest free buffer will end on 9 July.
First Direct Current 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 39.9%.
M&S Bank Current Account
£250 interest free overdraft
This account has an £250 interest-free overdraft. Go further into the red and you’ll be charged at 39.9%.
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.
Over 40,000 readers voted in the 2019 Awards, with First Direct being crowned the most trusted current account provider in the UK.
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.