Our bank account is the financial product that we use more frequently than any other, but many people rarely make sure theirs works for them.
Yet, different current accounts suit different people, with options ranging from those that pay interest, to ones that offer cheaper spending abroad, have good apps and budgeting tools, a better overdraft rate or package in extras, such as insurance.
Two banks are offering cash simply for switching. First Direct is paying £175 and TSB is offering customers £125 for switching.
Some banks are now offering very competitive linked savings rates. Digital banks, Monzo and Chase both pay 4.1 per cent for linked instant access savings, for example.
Banks such as Barclays, HSBC and Santander also grant access to exclusive easy-access savings rates which pay even higher.
If you’re unhappy with your current bank or spot a better deal elsewhere, it may well be worth considering a switch. You can find our picks of the best accounts below.
| Account | Perks | Conditions | Overdraft |
|---|---|---|---|
| First Direct 1st Account | £175 current account switching incentive. £250 interest-free overdraft. Earn 7% via Regular Saver Account. | Set up two direct debits/standing orders within 30 days. Pay in £1,000 within 30 days. You have to use the app. No branches | Above £250 it is charged at 39.9% |
| Chase | 1% cashback on everyday purchases for 12 months. 1% in-credit interest. Fee-free spending abroad. Access to linked easy-access savings deal paying 4.1%. Round-ups option for spare change pays 5%. | None required. You have to use the app. No Branches. | N/A |
| Nationwide FlexDirect | 5% in-credit interest up to £1,500 and fee-free overdraft, both for the first year only. After the first 12 months, interest rate drops to 1%. | Pay in £1,000 a month. | After the first 12 months it is 39.9% |
| Halifax Reward |
The choice of £5 a month paid into your account, or three magazine rentals or a free cinema ticket each month. | Spend £500 on your debit card each month or keep £5,000 or more in your account at all times. Also pay in £1,500 + into the account each month otherwise a £3 monthly fee applies. | 39.9% |
| Club Lloyds | £175 cash bonus for switching. Pays 1.5% in-credit interest on up to £4k, and 3% on £4k-£5k. Choose a reward each year from either 12 months of Disney+, six cinema tickets, an annual digital Coffee Club and Gourmet Society membership or an annual magazine subscription. | Must switch before 28 March. There is £3 monthly fee unless you deposit £2,000 a month into the account. | After first £50 its 27.5% |
| HSBC Advance | Access to Online Bonus Saver instant access account paying 4% on balances up to £50,000. | None | 39.9% |
| Santander Edge Up account | £185 switching bonus. Pays in-credit interest of 3.5% on up to £25k. Santander is paying 1% cashback a month. Capped at £15 for household bills and £15 for travel and groceries. It’s also fee free to use your debit card abroad. | £5 a month fee. You must pay in £1,500 a month and have two active direct debits. | 39.94% |
| NatWest Reward & RBS Reward account | £200 NatWest switching bonus. £5 a month back in rewards and 1% back from certain partner retailers.Access to regular saver paying 6.17% | Must pay £1,250 into the account and log into the mobile app within 60 days of switching. £2 monthly fee. Must set up two direct debits a month for £4 bonus, and then log into mobile banking once a month for £1 bonus. You must also pay in £1,250 minimum each month. | 39.49% |
| TSB Spend & Save | Earn £5 cashback for the first 6 months wen you make 20 debit card payments each calendar month. 2.92% with Spending Pots. Up to £2,000 overdraft. | None | 39.9% |
| Starling Bank current account | Fee-free spending and ATM withdrawals abroad. Award winning app. 3.25% interest on balances up to £5,000. | Online and smartphone-only bank. | 15, 25 or 35% depending on credit score. |
| Monzo Bank | Linked instant-access saver paying 4.1%. Fee-free spending abroad. Instant spending notifications. | Online and smartphone-only bank | 19%, 29% or 39% depending on credit score. |
| Kroo | In-credit interest paying 4.35% on balances up to £85k. Zero fees when spending abroad. Low overdraft rate of 24.9%. | Online and smartphone-only bank | 24.9% |
| Triodos Bank | Low overdraft rate of 18%. Promises only to lend on projects that make a ‘positive impact’ for people and the planet. | £3 monthly fee. | 18%. |
1. Best account for in-credit interest: Nationwide
Current account in-credit interest has dwindled in recent years, with many banking providers offering little to no interest to customers.
However, Nationwide has an introductory credit interest rate on its FlexDirect current account paying 5 per cent.
The special rate will be available for new applications on balances up to £1,500 for the first 12 months.
It means someone keeping at least £1,500 in the account could earn £75 in interest over the course of one year.
The current account king: Nationwide attracted almost 150,000 customers via the switching service in the final three months of last year by dangling incentives.
Watch out
Unfortunately, anyone who has previously held a FlexDirect account will not be eligible for the new rate.
However, if applicants have previously held a sole account only, they would be eligible for the introductory rate on a joint account and vice versa.
To qualify, switches must be made from another provider using the Current Account Switching Service (CASS) and a minimum of two active Direct Debits must be transferred as part of the switch and set up on the new account. CASS will do this automatically for you.
To benefit from the in-credit interest, holders must pay in a minimum of £1,000 each month.
On the last day of every month Nationwide will calculate the interest earned each day and then pay this interest on the first day of the next month.
Nationwide is the most generous when it comes to in-credit interest – albeit only on balances up to £1,500 and for one year only.
However, if the monthly income being deposited into the account drops below £1,000, you won’t receive any interest that month.
The 5 per cent rate ends after one year. Thereafter it drops to just 1 per cent. So it may be worth looking elsewhere after the 12 months for a better return on your money.
Verdict
For those who have bigger amounts of cash in their bank account, it could be worth considering new digital bank, Kroo which is currently paying 4.1 per cent on balances up to £85k. Kroo is also increasing the rate to 4.35 per cent from 1 August.
However, the interest rate is not the only reason for switching a current account.
Online and mobile banking offerings and better customer service are often cited as the main reasons behind people switching current accounts.
Overdraft limits, cashback and other niche lifestyle benefits are all factors that count for something as well.
Ultimately, however, if cold hard cash is all you’re after, the £200 switching perks currently being offered by NatWest, RBS and TSB may be more appealing.
Furthermore, for those that choose Nationwide, you may find yourself needing to switch again in a year when that in-credit interest plummets to a measily 1 per cent.
2. Best account for interest on a larger balance: Barclays Blue Rewards
Barclays banking customers who sign up to its Blue Rewards scheme will be able to benefit from an exclusive easy-access savings deal.
The Barclays Rainy Day Saver account pays 5.12 per cent interest on balances up to £5,000.
The account can be opened with as little as £1.
Anything over £5,000 will only earn 1 per cent, so it won’t be worth having anything above that in this account.
Someone stashing away £5,000 in the Rainy Day Saver will earn more than £250 in interest after one year.
Watch out
To benefit, savers will need to be a Barclays Blue Rewards members, which means opening a Barclays bank account in order to apply online.
Barclays Blue Rewards is a way to collect rewards, including up to £5 a month for having two direct debits paid out of a Barclays current account.
However, there are a few catches, including a £5 monthly membership fee and a commitment to pay at least £800 into the account each month.
Our verdict
Even with the £5 monthly charge nobody will argue that 5.12 per cent for what is essentially an easy-access deal is very good.
The best easy-access deal on our independent best buy tables pays just over 5.2 per cent.
The £5 monthly fee for Blue Rewards can be nullified by the £5 rewards you’ll recieve by setting up two direct debits going out of your account and paying in at least £800 each month.
Of course the balance cap of £5k will mean this may not be for everyone, but for anyone with a spare £5k that they want to keep close, switching to Barclays to take advantage could well be worthwhile.
3. Best account for cash signing up bribe: NatWest
Nationwide is offering new customers a whopping £200 in cash just to switch.
Anyone switching their main account to a NatWest current account will be eligible.
They need to pay in at least £1,250 to the account and log in to NatWest’s mobile app within 60 days.
The deposit of £1,250 does not have to be in one lump sum and can be made up of multiple payments. It must remain in the account for 24 hours.
When they meet these conditions NatWest will pay £200 into the new account within seven days.
Money spinner: NatWest is offering £200 to new joiners – the joint biggest of all cash incentives.
Watch out:
It’s worth noting that anyone who has previously received a switcher incentive from NatWest Group since 1 January 2020 will not be eleibible for the offer.
That includes people who have opened a NatWest or RBS current account on or after 1 January 2020.
Verdict:
In terms of cold hard cash, NatWest’s offer looks great in terms of the amount on offer. Santander and Club Lloyds are the only other banks paying a switching bonus and these are a lesser £185 and £175 respectively.
There are less hoops for customers to jump through to get NatWest’s switching bonus and the cash will arrive within a speedy 7 days of the current account switch being completed.
4. Best account for cashback: Santander
For those looking for a bank with a decent cashback offering Santander may be your best bet.
Its new Santander Edge Up account is also offering cashback on both debit card spending and direct debits, with up to £30 per month available, although there is a £5 monthly account charge.
The new bank account has effectively replaced Santander’s 123 current account, which has now been removed from sale.
However, existing 123 customers can continue to use their account as usual.
It’s also worth pointing out that Santander’s new account pays 3.5 per cent interest on balances up to £25,000.
This means someone maintaining the maximum balance will earn £875 in interest over the course of one year – before factoring in its £5 a month fee (see below).
Santander has unveiled its Edge Up account, which it claims offers customers the ability to earn over £100 a month in total with up to £30 in cashback and up to £71.72 in interest.
How it works
There is 1 per cent cashback on essential grocery shopping and transport-based debit card spending. This is capped at £15 a month.
There is a further 1 per cent cashback on household bills paid via direct debit covering council tax, gas and electricity, mobile, landline, broadband and paid-for TV packages. Once again, this is capped at £15 a month.
While the cashback sounds generous, in reality the majority of customers won’t get anywhere near the potential £30 a month.
To receive £30 monthly cashback they would need to spend at least £1,500 a month on eligible essential debit card spend and at least £1,500 a month on eligible monthly bills paid by direct debit.
Watch out
For all its benefits, there are some hoops and charges for any would-be customers to be aware of.
First and foremost, it comes with a £5 monthly charge, which will add up to £60 each year.
Customers must also pay in a minimum of £1,500 a month and set up two direct debits from the account.
Verdict
Despite the £5 monthly fee, we really like this card. The cashback and the 3.5 per cent interest rate makes it hard to beat in both those catergories.
Plus unlike a number of the big high street banks, its debit card is fee free when being used aboard including no Santander charges when using ATM’s overseas.
However, customers would be wise to check their monthly outgoings to check what cashback they will likely be on track to receive.
5. Best digital bank: Chase
Chase is part of US financial giant JP Morgan, and launched in Britain in September 2021.
Since launching, Chase has already hoovered up more than 1.6 million customers, and holds £15 billion in UK savings.
Ealier this year it announced it had also joined the Current Account Switch Service (CASS).
In terms of standout perks and features it’s hard to find another bank that comes close to matching it.
It offers 1 cent cashback on card spending for 12 months (capped at £15 a month), which can be extended for a further year if you deposit £500 a month into the account.
It has also introduced 1 per cent in-credit interest for money held on account.
It offers a linked instant-access savings account paying 3.8 per cent and regular saver round up function that automatically saves spare change and pays 5 per cent interest.
There are also no charges for using the Chase debit card abroad.
Chasing customers: Chase has attracted more than 1.6 million UK customers since it launched in September 2021.
Watch out:
Chase doesn’t have any branches, which might cause an issue for some customers who want face-to-face banking, or at the very least want to speak to someone on the phone.
It is also worth noting you will need a relatively new smartphone to run the account.
Your smartphone will need to run iOS 14 and above, or have access to Google Play on Android 8.1 and above, which means some devices are not supported due to hardware limitations.
The bank also does not currently offer joint accounts, so it will not necessarily work for everyone.
Chase does not allow overdrafts, so the limit on the payments you can make is the amount you hold in your account.
Our verdict:
Chase has clearly got off to a good start in the UK, attracting a continual flow of new customers within a very short space of time.
The customers themselves seem happy enough. The Chase banking app is rated 4.9 out of 5 on the Apple apps store and 4.2 out of 5 on the Google Play store.
Some Britons may not be ready to fully embrace digital banking, but with fee-free overseas spending and ATM withdrawals, perhaps they should consider trying it for their holiday spending.
Equally with a 3.8 per cent linked instant-access account, it could be a great secondary bank account to store savings – particularly when many of the big banks are paying low rates.
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