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Best Bank Accounts

5% interest or £100 bonus

Martin

Updated Weekly

The current account market is undergoing major upheaval with a host of providers slashing interest or rewards. Yet there are a host of top deals as banks still lust for your custom.

Switching is easy yet millions have never done it, languishing in accounts with shoddy service, that levy huge fees or pay a pittance. This is a full guide on how to max your returns.

10 tips to find your best account

Not every bank account's going to be the right one for you. But with these 10 tips, you can find out how to find and switch to the best account for YOU.

Switching should now be quick & hassle-free

Switching bank accountsIf you haven't switched bank accounts in the last couple of years, you'll find that the process is now much quicker and easier than it used to be.

This is because 'seven-day switching' was introduced in September 2013, meaning switching accounts is now – for the majority – quick, easy and completely pain-free. All you need to do is open a new account, then use their switching service to move everything across.

Under the scheme (provided your existing bank's signed up), a switch takes seven working days, all payments going in, eg, salary, and out, eg, utility bill direct debits, will be moved to your new account, and any wrongly applied charges will be refunded.

If you haven't tried it, and your bank gives you lousy service, read below for full info, then take a look at our top pick accounts.

Quick questions

How long after I switch will payments made to my old account find me?

Does seven-day switching automatically move direct debits and standing orders?

Some switching bonuses or perks require 'active' direct debits. What does this mean?

Are recurring payments from my card also moved?

Are all banks and building societies signed up to seven-day switching?

Do I HAVE to close my old account when switching?

What day will my switch happen on?

Can I still switch if I'm overdrawn?

Will my new debit card and PIN arrive within the seven days?

The best-buy bank accounts with no or low minimum pay-ins

Most hot bank account deals require you to 'pay in' a certain amount each month to get the benefits. And many are worried they'll fall foul of this, making the deal pointless.

In fact, just because a bank has a minimum pay-in, that doesn't mean you must be in credit. It means that you must pay in a set amount – banks' way of ensuring your income/salary goes through the account.

For example, £1,000/mth equals a £13,100/yr pre-tax salary. So the best thing to do is to find all the top accounts that meet your minimum monthly pay-in.

The only best buys without a minimum pay-in are the M&S account – which gives a free £100 M&S gift card to switchers, plus a £100 0% overdraft and 5% linked regular saver – the NatWest account, which gives 3% cashback on bill spending (though it has a £3/mth fee), and the Tesco account, which pays 3% interest on up to £3,000.

Additionally, both Halifax allows you to get its switching bonus without paying in a specific amount, though you won't get its ongoing rewards unless you pay in £750/mth.

Can I jemmy the minimum pay-in amount? Usually, yes. Quite simply, the rules say you need to pay in a set amount from external sources. So let's say you want a £1,000 pay-in but only have £500 coming in. If you get the £500 paid in, withdraw it either as cash or to an account with another bank, then pay it back in – BINGO, you've qualified.

Some banks have wised up to this, though – we've had reports that HSBC in particular may not accept you if your income's not high enough to meet the pay-in.

See a full list of accounts ranked by minimum pay-in

Which pays more? Free intro cash, or savings interest?

The majority of accounts in this guide fall into two categories. The first lot pay you a one-off bonus of up to £100 to switch to them. The second pay interest on varying balances within your current account. But which type's better for you?

Well, a few months ago, we would have said that if you have savings, an interest-paying account would be the most rewarding. But, with Santander, Lloyds and TSB all cutting their high interest rates, the market's been shaken up.

Our message now is one of chasing short-term cash gains. As the interest-paying providers have shown, loyalty doesn't pay. Now the bonus-paying accounts will have their time, as they pay up to £100 when you switch to them. And some even give ongoing rewards on top. This is important, as the switch bonuses themselves are a one-off payment, so if you won't switch again you can still get rewarded for staying.

But, if you want somewhere guaranteed for your savings, Nationwide FlexDirect pays 5% AER fixed for a year on £2,500, which'd give you a maximum £122.25 interest. If you've a larger lump sum, on a one-year comparison at current rates Santander 123 will beat all other accounts – including those such as First Direct that have an intro bonus and ongoing rewards – at around £14,500 of savings (assuming cashback covers the £5 fee).

Beyond this, it's tricky to say which account is best for you. Here are a few things you need to consider when making the choice between interest or bonuses...

Quick questions

How often can I switch?

Where could I save otherwise?

Do you pay tax on savings interest?

If you're often overdrawn, focus on the account with the cheapest overdraft, not other benefits

Angry ManIf you're often or always overdrawn, then pick a bank account that charges you as little as possible for using your overdraft.

There are huge differences in the amounts different banks charge for going overdrawn; we've identified the cheapest ones in our top accounts if you're overdrawn section.

If you are in the red, it's worth trying to get out of the mire by seeing if you can cut outgoings by doing a money makeover and then making (and sticking to) a budget. But, that's not the only way. See if any of the methods in our quick questions below could help you.

Quick questions

Can you shift the debt to a 0% credit card?

Can you SPEND on a credit card instead of from your current account?

Can you change the dates your bills go out?

Does your account give you a 0% overdraft buffer?

Have you registered for free 'close-to-overdraft-limit' text alerts?

All the top bank accounts require you to pass a credit check

Most of these accounts offer overdraft facilities, which means that the bank will credit-check you when you apply for the account to see if you're someone it'd lend to, and if you did go into your overdraft, that you've a track history of repaying what you owe.

Banks will use this credit check, plus data on your application form, to decide whether to accept or reject you for the account you applied for. If you don't want that, check out the bullet point below...

Quick question

Could you be rejected when applying for a bank account?

Can't get a bank account? There is a way...

Sadly, over a million people in the UK are rejected from mainstream bank accounts like the ones in this guide. Yet as long as you can prove your identity, you should be able to get a basic bank account – they don't credit-check as strictly, meaning most will be able to get one.

You can do most of the same things with a basic bank account that you can with a normal bank account – set up standing orders and direct debits, pay from the account using a debit card, etc. The main difference is that you won't be able to get an overdraft. Read full help and tips in our Basic Bank Accounts guide.

Quick questions

What does the bank charge if you try to spend more than you've got?

How do you open a basic bank account?

Avoid going into your unauthorised overdraft or banks turn nasty

It's said a bank will lend you an umbrella when the sun shines and ask for it back when it rains. Go beyond your overdraft limit and this feels true. When you're in trouble, charges get hefty, up to £15 a pop.

If you are overdrawn and flirting with your limit, don't just tackle the symptoms. Try using the free Budget Planner, give yourself a Money Makeover to cut bills, and check the tips to avoid charges in the Compare Bank Charges tool. It's also worth seeing if your bank will temporarily give you a larger overdraft limit.

If you have got into trouble and see charge upon charge rack up so that it's put you in financial hardship, it can be possible to reclaim bank charges. See below for who can claim.

You could save £100s on travel, mobile & breakdown insurance with a packaged account

parcel tied up with string

You'll either love 'em or hate 'em. Packaged accounts can be great, saving some £100s a year, as for a monthly fee you get a host of insurances, typically travel, breakdown and mobile phone insurance.

But they can also be absolutely worthless if you don't need the cover or you could have got it cheaper elsewhere, so always check first. See the Best Packaged Accounts guide for more, including a tool which helps you find the right account for you (if there is one).

Quick questions

What's the real annual cost of one of these accounts?

What's the value of the 'benefits' you're getting?

If you're not benefiting, why do you have the account?

Think all banks are b*****ds? Credit unions do bank accounts too

credit union

Fed up with banks? None of the accounts in this guide right for you? Some of the 500 credit unions across the UK offer bank accounts. Your money's protected, plus you're helping out your community.

Credit unions have the same £75,000-per-person protection for your cash as banks, plus they're usually more lenient about charges if you try to overspend. See if there's a credit union offering bank accounts near you, and read full info about what's on offer in our Credit Unions guide.

If you're a student or graduate, the accounts below aren't the right ones for you

If you're a student or graduate, there are accounts designed especially for you, many of which offer 0% overdrafts for a long period, meaning you can easily beat the terms of the best accounts mentioned in this guide. Find the best: Read the Best Student Accounts or Best Graduate Accounts guides.

Best buys Top accounts with switching bonuses

There are several accounts that offer you a bribe to switch your existing account to them. Many pay cold hard cash, others offer vouchers. We've analysed the best here. Bear in mind that you typically need to meet some conditions to get the bonus, so check you're able to do that before applying.

We've put these top, as provided the switching offer is still on when you apply (double-check), you have more security of it staying compared with the interest-paying accounts below, many of which are slashing rates.

These are the right accounts to switch to if...

...you're always in credit

...you don't have enough spare cash to make use of the interest-paying accounts below

...you want quick-ish cash for something

These are the wrong accounts to switch to if...

...you don't have an existing bank account

...you're regularly overdrawn

...you don't want to fully switch, by using the switching service

...you can't meet the minimum pay-ins required

First Direct

Free £100 cash & rated no.1 for customer service

First Direct*

Newbies to First Direct* can now get £100 to switch to it. It has excellent customer service – it's won every bank service poll we've ever done, with 91% of its customers rating it 'great' – only 3% said they got poor service. You also get a small £250 0% overdraft, and can open a linked 5% regular saver.

Need-to-knows
  • First Direct has told us it currently has no plans to change the perks associated with the 1st Account.
  • To get the £100 switching bonus, you need to use First Direct's switching service to fully switch and close your existing account and pay in at least £1,000 within three months of your account opening.
  • Once you've made the payment, the £100 is credited to your account within 28 working days.
  • This account has a £10 monthly fee, but this is waived each month you either pay in £1,000, have an average monthly balance of £1,000 or hold selected other accounts with First Direct.
  • You can't get the switching bonus if you've ever held an account with First Direct before.
  • First Direct shares its £75,000 UK savings safety guarantee with HSBC, so ensure you don't hold more than £75,000 across the two banks.
Rated 1st  ribbon

How First Direct rates on service (in credit)

91% Great

6% okay

3% poor

Date: Aug 2016 Voters: 992

Stats box
  • Minimum monthly pay-in : £1,000 (equates to an annual salary of £13,100)
  • In-credit interest: None
  • Arranged overdraft cost: 0% under £250, 15.9% EAR above that
  • Unarranged overdraft cost: £10 buffer then £5/day (max £80/mth) plus 15.9% EAR
Key questions

How do I get the £100 switching bonus? Once you've opened and been accepted for the account, you have three months in which to complete your switch and pay in £1,000. Once you've done that, the £100 bonus will be paid within 28 working days.

What if I can't pay in £1,000 every month? If your salary reduces and you can no longer pay in £1,000 per month you'll be whacked with a £10 monthly fee. However, if you have another account with First Direct – savings or a mortgage – then it's waived, so just open a bog standard savings account (this trick excludes the 5% regular savings account), and put the minimum amount in. The fee will also be waived if you maintain an average monthly balance of £1,000 or more.

Can I open two of these accounts? You can open two accounts if the second one is a joint account, but you'll only get the switching bonus once (as it's just for new customers). Plus, opening a joint account financially links you with the other person, so think carefully before doing so.

Are there any other perks? There aren't any additional perks on the bank account – but you'll be eligible to open up its linked 5% regular savings account.

M&S Bank Current Account

Free £100 gift card plus £10 per month for a year

M&S Bank*

The M&S Bank* Current Account is one of the only accounts in this guide to allow you to switch to it without requiring a minimum pay-in. It gives you a £100 M&S gift card for switching to it, plus reward points when you shop in M&S. You get a decent £100 0% overdraft, and a linked 5% regular saver.

For an extra perk, if you can commit to a minimum pay-in, you can get an extra £10 added to the gift card each month for the first year when you deposit £1,000/mth. This means that you could get up to £220 for switching to M&S and keeping the account for at least a year.

Need-to-knows
  • M&S Bank has told us that it currently has no plans to change the perks associated with its Current Account.
  • To get the £100 bonus you must open the account and fully switch your account using M&S Bank's switching service within three months.
  • You need to switch at least two active direct debits to qualify for the bonus.
  • Once you've switched, you'll get the bonus within a month.
  • You must not have previously switched a current account to M&S to be eligible for the bonus.
  • There's no minimum monthly pay-in to get the £100, but if you want the extra £10/mth you must pay in £1,000 each month.
  • There's a linked 5% regular saver account that you can open when you have this account.
  • Branches are in larger M&S stores, so have longer opening hours than some other banks.
  • M&S Bank has the full £75,000 UK savings safety guarantee.
Stats box
  • Minimum monthly pay-in: None (£1,000 for £10 monthly payment)
  • In-credit interest: None
  • Arranged overdraft cost: 0% up to £100, 15.9% EAR above that
  • Unarranged overdraft cost: £50 buffer, 15.9% EAR interest. M&S Bank only allows you to go £50 over your overdraft limit.
Key questions

What's the deal with reward points – how much are they worth? If you spend using your debit card on this account, you'll get one point for every £1 spent in M&S, or in its online store. You get one £1 voucher for every 100 points, and M&S sends these to you quarterly. Bear in mind that this does mean you'd need to spend £500 at M&S just to get a £5 voucher.

How does the overdraft work? If you're accepted to get an account, then M&S give you an automatic £500 overdraft – though you may get more if your credit score's good enough.

The first £100 is interest free, and interest of 15.9% EAR applies afterwards. M&S doesn't charge overdraft fees, but at the same time, doesn't let you go more than £50 over your overdraft limit (except if payments are guaranteed).

When do I get the £100 gift card? You must apply for the account using the links above. If accepted, you'll either need to call M&S Bank or go into a branch within three months to complete your switch. Once you've completed the switch, you'll get the gift card and voucher within a month.

How do I get the £10 monthly payment? As long as you've switched your account, including at least two direct debits, and pay in £1,000 each month, you'll get an additional £10 credited to your gift card every month for the first 12 calendar months after receiving your initial bonus. The card will be topped up by the 15th of the following month.

Are there any other perks? You get fee-free overseas ATM withdrawals using the debit card, but you'll still pay a 2.75% conversion fee on spending. You also get improved currency rates from M&S bureaux.

Finally, M&S Bank offers preferential loan rates to its current account customers.

TSB Classic Plus

Ends Sun. Free £100, plus 5% interest (3% from Jan) & up to £5/mth cashback

TSB Classic Plus*

Until 11 Dec 2016, via this link, TSB* gives accepted switchers to its Classic Plus account a free £100 (go direct you get nowt). You'll also get 5% cashback on the first £100 of contactless debit card spending a month (so a free fiver each month for most) until Sep 2017, and interest of 5% on balances up to £2,000 - though this drops to 3% from January.

Need-to-knows
  • To get the switching bonus, you need to apply for the account by 11.59pm on 11 Dec 2016, and fully switch to it using TSB's switching service by 30 December. You'll also need to switch at least two direct debits (which must still be active for at least 28 days after the switch completes), and pay in at least £500 in the first 28 days from switching.
  • You need to allow cookies in your browser else the £100 switching offer mightn't track.
  • You won't get the bonus if you switch a joint account, or if you've ever got a switching bonus from TSB before.
  • The bonus is paid to your account within 28 working days of the switch completing as long as you've met the terms above.
  • If you have any issues with your switch, call TSB's Switcher Team on 0345 835 7838.
  • The headline 5% interest rate will be cut to 3% on a maximum of £1,500 from 4 Jan 2017.
  • You'll need to pay in £500/mth, register for internet banking & opt for paperless statements & correspondence to get the interest.
  • You'll get 5% cashback on the first £100 spent each month on your contactless debit card up to 30 Sep 2017, as long as you're registered for internet banking.
  • TSB has the full £75,000 UK savings safety guarantee.

How TSB rates on service (in credit)

72% Great

22% okay

6% poor

Date: Aug 2016 Voters: 414

Stats box
  • Minimum monthly pay-in : £500 (equates to an annual salary of £6,000)
  • In-credit interest: 5% AER variable under £2,000. From 4 Jan 2017, you'll get 3% AER variable under £1,500.
  • Arranged overdraft cost: Up to £25 fee-free and £10 buffer, then 19.94% EAR + £6/mth usage fee
  • Unarranged overdraft cost: £10 buffer, then 19.94% EAR with charges of £5/day under £25, £10/day for £25+ (max £80/mth); £10 unpaid item fee (max three/day)
Key questions

How much interest can I earn? You can earn 5% AER on the first £2,000 that you have in the account, but no interest on anything over that amount. Put and keep the full £2,000 in, and you'll get £97.80 before tax.

From January 2017, you'll earn 3% AER on the first £1,500 in the account, meaning the maximum interest you'll earn will be £44.40 per year.

Can I have more than one account? You can only open two accounts if one is a single and one is a joint account - think carefully before doing this, as if you join finances with someone else, their credit record affects yours.

Each account needs to be operated as if it's a main current account, so you need to pay £500 into both each month (from an external source). You also need to sign up to internet banking & paperless statements on both accounts to get the interest paid.

Halifax Reward Bank Account

Free £100 cash + £5 reward per month, though this falls to £3 from Feb

Halifax Reward

The Halifax Reward account gives you £100 to switch to it. This is one of the few accounts that pay both a switching bonus and an ongoing reward, though from February it'll be cut from £5 to £3 per month.

Need-to-knows
  • The £5/mth reward is being cut to £3/mth from February 2017. Halifax has confirmed that the £100 switching bonus will remain.
  • You'll get the bonus paid into your account before the switch has completed.
  • To get the £5/mth 'interest' (£3/mth from February), you need to pay in £750 each month, remain in credit, and pay out at least two direct debits.
  • Beware the overdraft – its daily fees can add up, plus if you're overdrawn, even only for a couple of days, you won't get the £5 that month. Do note though that if you switch, you get 6 months with no planned overdraft fees.
  • You won't be able to get the bonus if you've received any incentive for switching to Halifax since January 2012, or if you're switching from a Bank of Scotland account.
  • Halifax shares its £75,000 UK savings safety guarantee with the rest of the HBOS group, so don't hold more than £75,000 across the group.

How Halifax Reward rates on service (in credit)

63% Great

32% okay

5% poor

Date: Aug 2016 Voters: 447

Stats box
  • Minimum monthly pay-in: £750 (equates to an annual salary of £9,150)
  • In-credit interest: £5/mth
  • Arranged overdraft cost: No fees for 6mths if you switch. £50 buffer; then charges are tiered. Up to £2k: £1/day. £2k-£2,999: £2/day. Over £3k: £3/day.
  • Unarranged overdraft cost: £5/day
Key questions

What if I can't pay in £750 every month? If you miss a month's pay-in, you don't earn the fiver. You won't face any other penalties.

What if I don't have two direct debits? As long as you use Halifax's current account switching service you'll still earn the £100 switching bonus, but without two direct debits, you won't earn the £5 a month reward. But, you could consider setting up direct debits, even if it's just £1/mth to charity, to get the reward.

What about tax on the interest? We've called it interest, but it doesn't work in the way other accounts do, as the amount you have in the account doesn't change how much you get. HMRC tells us this is not counted as savings income and therefore not covered under the personal savings allowance.

This means that Halifax continues to pay you with basic-rate tax deducted (which is why the payment hasn't increased to £6.25/mth). So, if you're a non- or higher-rate taxpayer, you should claim extra 'interest' using the R40 form or pay more via tax returns (see Interest Rates Guide).

Are there any other perks? You can earn cashback at some retailers, though you need to have online/mobile banking to do this. Halifax's Cashback Extras means that if you shop at certain selected retailers, including Argos, Homebase and Body Shop, you'll get some cashback if you use your Halifax debit card.

You need to have online or mobile banking, as you need to activate your cashback offers before using them. Cashback offers are tailored, so not every customer will get the same offers.

Best buys Top current accounts that pay you interest

Only a few years ago, several banks launched high-interest current accounts. But, following August's Bank of England base rate cut, and hints of more, there's been a shake-up in the market, As Santander, Lloyds and TSB have announced forthcoming rate cuts to their high interest accounts below.

It's clear loyalty no longer pays with bank accounts, so it's also worth looking at the switching bribes above, and being ready to switch regularly to chase the free cash.

So, here are the top deals – but remember all interest rates are variable (unless stated) so could drop further in future...

These are the right accounts to switch to if...

...you're always in credit.

...you can't find another account or investment that beats the interest.

...you're likely to have enough cash to leave in the account to actually earn the interest.

These are the wrong accounts to switch to if...

...you're regularly overdrawn.

...you don't have enough cash likely to be sitting in the account to make it worthwhile.

...you'd rather put your money elsewhere, eg, invest it or buy a property.

...you don't have financial self-control, as it can be easy to spend money sitting in your current account.

Santander

Get 1.5% interest on up to £20,000 & up to 3% cashback on bills

Santander 123*

The Santander 123* account wins for those with savings above £10,000 – or will once the other banks' rate cuts have come into effect. The 1.5% interest is payable on entire balances up to £20,000 which makes it a winner for many bigger savers.

This account does have a £5/month fee but for most users that's more than covered by the 3% cashback this account gives on utility bills paid by direct debit.

Need-to-knows
  • Get cashback on some bills – 3% on phone, broadband, mobile & TV, 2% on gas & electricity and Santander home insurance, 1% on water, council tax & Santander mortgage payments (max £10/mth on mortgage).
  • Santander only pays interest & cashback in months you've paid in £500+, had two 'active' (so not disused) direct debits, and paid your monthly fee. Watch out, it counts a month from the anniversary of the account opening, not a calendar month.
  • You can save more than £20,000 in the account, but won't earn interest on anything over £20,000.
  • You can have two accounts in your name, but one must be joint – meaning couples can save £60,000 between them. Here's how this works
  • Santander shares its £75,000 UK savings safety guarantee with Cahoot, so don't hold more than £75,000 across the two banks.
Rated 3rd ribbon

How Santander 123 rates on service (in credit)

76% Great

21% okay

3% poor

Date: Aug 2016 Voters: 1,130

Stats box
  • Minimum monthly pay-in : £500 (equates to an annual salary of £6,000)
  • In-credit interest: 1.5% AER variable up to £20k
  • Arranged overdraft cost: 0% for four months after switching, then £12 buffer and £1/day
  • Unarranged overdraft cost: £12 buffer then £6/day (max £95/mth)
Key questions

What if I've more than £20,000? Any extra above £20,000 gets no interest, which means that if you just left £20,000 in the account the whole time, you'd actually get the gross rate of 1.49% – as the monthly interest earned would take you over the £20,000 limit (and therefore wouldn't be able to earn interest itself). This would mean that instead of getting £300 interest in a year that you'd get if the interest could compound, you'd only get £298.

Is there a catch with the cashback? Santander has a list of qualifying suppliers (though it's worth checking with it about your suppliers, even if they're not listed). You also need to pay your bills by direct debit from the account to get the cashback.

How much cashback could I really earn? We crunched the numbers on how this stacks up for low, average and high bill payers. After the fee, we worked out low users would be up by £11 a year, average users £79 and high users £190, even before savings interest's taken into account.

The cashback works best for those who have a mortgage payment of around £1,000 a month with Santander – but even without the mortgage payment, anyone with high bills will be able to make money from this account, even after the fee is covered.

Our table details how the account works for low, medium and high bill payers.

Bank of Scotland

Up to 3% interest on £5,000 (+ trick to get it on £15k), though this rate could be cut

Bank of Scotland Vantage

The Bank of Scotland Classic Account pays 3% AER variable on balances between £3,000 and £5,000. Its interest rate is unmoved since August's UK base rate cut and it says there definitely won't be a cut this year. After that who knows - this could be short lived - yet it must give 60 days notice in any case.

However there is a trick in that the rules allow you to open three, giving you 3% on £15,000. You will still need to meet the criteria on each though - see our multiple account tips below for help.

Need-to-knows
  • The interest doesn't automatically come with the account – you need to add 'Vantage' to the account to get it. You can do this during your application.
  • You'll need to pay in £1,000/mth, stay in credit, and have two different direct debits paid from the account(s) each month to get the interest.
  • If you've less to save, you'll get 1.5% AER on £1 to £999.99 and 2% AER on £1,000 to £2,999.99.
  • Bank of Scotland shares its £75,000 UK savings safety guarantee with Halifax.
  • Multiple accounts tip one: Some MoneySavers have found issues if you try to open the second or third accounts too quickly. Waiting 48 hours between each and calling up instead of applying online seems to make things easier.
  • Multiple accounts tip two: You can recycle £1,000 to meet the pay-in criteria - simply set up a standing order to move it from account one to account two then two days later to account three, but remember to keep cash in to pay the direct debits.
  • Multiple accounts tip three: If you don't have enough direct debits, set up small direct debits to specific savings accounts or, even to charity. Bank of Scotland doesn't care where the money is going, as long as they're direct debits. See full alternatives.

How Bank of Scotland rates on service (in credit)

51% Great

37% okay

12% poor

Date: Aug 2016 Voters:105

Stats box
  • Minimum monthly pay-in: £1,000 (equates to £13,100 annual salary)
  • In-credit interest: 3% AER variable if you've £3,000 to £5,000 (on entire balance); 2% on £1,000 to £3,000; 1.5% under £1,000; nothing above £5,000
  • Arranged overdraft cost: £25 buffer, then 19.89% EAR + £6/mth usage fee
  • Unarranged overdraft cost: £10 buffer, then 19.89% EAR with charges of £5/day between £10 and £25 over limit, £10/day for £25+ (max £80/mth); £10 unpaid item fee (max three/day)
Key questions

How much interest can I earn? You can earn 3% AER on the entire balance if you have between £3,000 and £5,000 in the account, but no interest on anything over that amount. Put and keep the full £5,000 in, and you'll get £148.

If you've less to save, you'll get lower rates of interest – 2% AER between £1,000 and £2,999.99 and 1.5% AER between £1 and £999.99.

Can I have more than one account? You can open three of these accounts. But each needs to be operated as if it's a main account, so you need to pay in £1,000 to all three each month, have two direct debits going out, and stay in credit to get the interest.

Nationwide

5% interest fixed but only for a year, 1% afterwards

Nationwide FlexDirect*

Switch to the Nationwide FlexDirect* account and you'll get an interest rate of 5% AER on the first £2,500 of your cash. This rate is fixed for the first year you hold the account, which gives some security in a world of uncertain savings rates. Be aware that it drops to 1% from year two, so look around then to see if it can be beaten.

Need-to-knows
  • Nationwide has told us it has no plans to change the rates on this account. Plus, because the rate is fixed, provided it's still at 5% when you apply for the account, you know that's the rate you'll get for the first year.
  • To get the interest, you'll need to pay in £1,000+ per month.
  • If you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can refer up to 10 friends a year.
  • This account also offers a 12mth 0% overdraft, though the limit you get is credit score dependent. After the 12 months, it charges 50p per day for the overdraft.
  • Nationwide has the full £75,000 UK savings safety guarantee.
Rated 2nd ribbon

How Nationwide rates on service (in-credit)

80% Great

16% okay

4% poor

Date: Aug 2016 Voters: 984

Stats box
  • Minimum monthly pay-in: £1,000/mth to get interest
  • In-credit interest: 5% AER fixed in year one on up to £2,500, 1% in subsequent years
  • Arranged overdraft cost: Year one: 0%; years two+: £10 buffer, then 50p/day
  • Unarranged overdraft cost: £10 buffer, then £5/day (max £60/mth), £5 paid/unpaid item fee (max £35/mth). Total unarranged fees capped at £95/month.
Key questions

How do I get the interest? To get interest, you need to pay in £1,000 a month, though you only get interest when you're in credit.

What if I can't pay in £1,000? Nothing happens, you just won't be paid any interest if you're in credit at all that month.

How much will the overdraft cost? For the first year, your overdraft will cost nothing so long as you stay within your limit. After that, you pay 50p per day you're overdrawn (within your limit). So, if you have a limit of £1,500 and owe £1,000, then you'll pay £182.50 if you're overdrawn every day of the year.

Don't bust your overdraft limit, as you'll pay £5 per day plus a charge of £5 for every paid or unpaid item.

So, use the 12 months when your overdraft is at 0% to get your finances in order and avoid future fees. For tips, see Cutting Overdraft Costs.

Can I have two accounts? And two overdrafts? You can definitely have two accounts, and can even get two lots of interest – though one of your accounts must be joint to get this. Nationwide say that you may be able to get two overdrafts if you have two FlexDirect accounts, but each would be assessed on its merits, so there's no guarantee.

TSB Classic Plus

5% on £2,000, £100 to switch, and up to £5/mth cashback, but dropping to 3% on £1,500 from Jan

TSB Classic Plus*

The TSB Classic Plus* pays 5% AER variable on the first £2,000 in your account, making it the top account for lower sums. However, the rate is dropping from January, from when it'll pay 3% on up to £1,500 (our rate cut news story has more).

You can also get 5% cashback on the first £100 spent each month on your contactless debit card until 30 September 2017. Take advantage of this and you could get up to £104 in a year, just beating Club Lloyds below.

Plus, if you switch to this account you get a free £100, though you need to meet certain criteria to get this extra bonus. You don't have to fully switch if you're only after the interest, though you will need to pay in at least £500 a month & register for internet banking and paperless statements.

Need-to-knows
  • The headline 5% rate will be cut to 3% on up to £1,500 from 4 January 2017.
  • This account has one of the lower minimum monthly pay-ins at £500/month.
  • Unusually, you don't need to have any direct debits going out of the account if it's just the interest you want.
  • You'll need to pay in £500/mth, register for internet banking & opt for paperless statements & correspondence to get the interest.
  • You'll get 5% cashback on the first £100 spent each month on your contactless debit card up to 30 September 2017, as long as you're registered for internet banking.
  • If you have any issues with your switch, call TSB's Switcher Team on 0345 835 7838.
  • TSB has the full £75,000 UK savings safety guarantee.

How TSB rates on service (in credit)

72% Great

22% okay

6% poor

Date: Aug 2016 Voters: 414

Stats box
  • Minimum monthly pay-in: £500 (equates to an annual salary of £6,000)
  • In-credit interest: 5% AER variable under £2,000. From 4 Jan 2017, you'll get 3% AER variable under £1,500.
  • Arranged overdraft cost: Up to £25 fee-free and £10 buffer, then 19.94% EAR + £6/mth usage fee
  • Unarranged overdraft cost: £10 buffer, then 19.94% EAR with charges of £5/day under £25, £10/day for £25+ (max £80/mth); £10 unpaid item fee (max three/day)
Key questions

How much interest can I earn? You can earn 5% AER on the first £2,000 you have in the account, but no interest on anything over that amount. Put and keep the full £2,000 in, and you'll get £97.80.

From January 2017, you'll earn 3% AER on the first £1,500 in the account, meaning the maximum interest you'll earn will be £44.40 per year.

Can I have more than one account? You can only open two accounts if one is a single and one is a joint account – think carefully before doing this, as if you join finances with someone else, their credit record affects yours. Joint accounts can only be opened in branch.

Each account needs to be operated as if it's a main current account, so you need to pay £500 in to both each month (though you can fund one from the other). You also need to sign up to internet banking & paperless statements and correspondence on both accounts to get the interest paid.

Club Lloyds Bank Account

Get 4% if you have £4,000-£5,000 but dropping to 2% on up to £5,000 from Jan

Club Lloyds

The Club Lloyds account pays 4% AER variable if you've £4,000 to £5,000 in it. But, crucially, you'll only get this rate until January, at which point the headline interest rate will be just 2%, though it will be paid on the full balance (for more, see our Club Lloyds rate cut news story).

Need-to-knows
  • This account has one of the higher minimum monthly pay-ins, at £1,500. There's a £5 fee each time you miss a month's pay-in (£3 from Jan 2017).
  • You'll only get the top 4% rate if you have £4,000-£5,000 in the account. Slip below this, and you get lower interest rates.
  • The headline 4% rate will be cut to 2% in January 2017.
  • You need to have two or more direct debits going out each month to get the interest.
  • Lloyds shares its £75,000 savings safety guarantee with Cheltenham & Gloucester, so don't hold more than £75,000 across the two banks.

How Lloyds rates on service (in credit)

52% Great

35% okay

13% poor

Date: Aug 2016 Voters: 557

Stats box
  • Minimum monthly pay-in : £1,500 (equates to £21,850 annual salary)
  • In-credit interest: 4% AER variable if you've £4,000 to £5,000 (on entire balance); 2% on £2,000 to £4,000; 1% under £2,000; nothing above £5,000. From Jan 2017, you'll get 2% AER on £1 to £5,000.
  • Arranged overdraft cost: Up to £100 fee-free, then 19.89% EAR + £6/mth fee
  • Unarranged overdraft cost: £10 buffer, then 19.89% EAR + £5/day under £25, £10/day for £25+ (max £80/mth), £10 unpaid item fee (max three/day) + £6/mth fee
Key questions

How much interest can I earn? The interest is listed as 1% AER on balances of less than £2,000, 2% AER on the whole balance if you've £2,000 to £4,000 and 4% AER on the whole amount if you've £4,000 to £5,000.

Any extra above £5,000 gets no interest, which means that if you always had £5,000 or more in the account, you'd actually get the gross rate of 3.93% – as the monthly interest would take you over the £5,000 limit. This'd mean that instead of getting £200 interest in a year, which you'd get if the interest could compound, you'd only get £196.50.

Of course, from January, you'll only be able to earn 2% interest, though this will be paid on the whole balance, so the maximum will be £99 a year.

Can I have more than one Club Lloyds account? You can only open two accounts if one is a single and one is a joint account – think carefully before doing this, as if you join finances with someone else, their credit record affects yours.

Each account needs to be operated as if it's a main current account, so you need to pay £1,500 into both each month to avoid the £5 fees. Each account also needs at least two direct debits to be paid out of it each month for you to be paid interest.

Are there any other perks? Account holders can benefit from discounts on Lloyds' mortgage range, and a regular saver paying 3% AER.

Plus, each year you have this account, you can choose a free 'lifestyle benefit' – eg, six Vue cinema tickets, a magazine subscription or a dining discount card.

Tesco Bank

3% interest on £3,000, though no cuts have yet been announced to the rate

Tesco Bank

The Tesco Bank Current Account pays 3% AER variable on the first £3,000 in your account, making it a good option for lower sums if you don't want to get the accounts above. But, beware... Tesco Bank hasn't announced any changes to its interest rate, unlike other accounts in this guide, so the rate could be cut in future. As an extra perk, you'll also get Clubcard points on your debit card spending.

Need-to-knows
  • Tesco Bank has told us it has no current plans to cut this rate, but it is variable, so can change at any time
  • Unusually there's no minimum pay-in on the account to get the interest.
  • You'll get five Clubcard points per £4 spent in Tesco, and one point for every £8 spent elsewhere.
  • Service is good, with 71% of Tesco Bank customers in our recent poll rating it 'great', though we had a limited number of votes.
  • This account's not available to you if you live in Northern Ireland.
  • Tesco Bank has the full £75,000 UK savings safety guarantee.
Stats box
  • Minimum monthly pay-in: None
  • In-credit interest: 3% AER variable under £3,000. Nothing above.
  • Arranged overdraft cost: 18.9% EAR
  • Unarranged overdraft cost: 18.9% EAR; £5 paid item fee; £5 unpaid item fee (max £50 per statement)
Key questions

How much interest can I earn? You can earn 3% AER on the first £3,000 you have in the account, but no interest on anything over that amount. Put and keep the full £3,000 in, and you'll get £88.80.

Can I have more than one account? Yes, you can open two accounts.

The one exception to this is if you have an old Clubcard Plus savings account, in which case you'll only be able to get one of these accounts.

Best buys Top accounts with cashback

There are certain accounts that pay you cashback on household bills, though they tend to have monthly fees as well. It's worth checking you spend enough on bills to still make money after the fee – if not, then you're better off looking at other accounts that reward you in different ways.

These are the right accounts to switch to if...

...you spend a lot on your monthly bills

...you don't have enough cash available to earn interest

...you pay your bills by direct debit

These are the wrong accounts to switch to if...

...you have very low monthly bills

...you have a lot of savings

...you don't pay your bills by direct debit

Natwest Reward Account logo

3% cashback on household bills, but has a monthly fee

NatWest*

If you don't have any savings and spend over £270 each month on your household bills, then NatWest's* Reward Account could be a good option for you.

For a £3 monthly fee, it will pay you 3% cashback on seven different bills, including council tax, water and energy, as long as you pay by direct debit. There is no cap to the amount you can earn, and unlike several of the accounts in this guide it has no minimum monthly pay-in. However, don't see the cashback as an excuse to spend more than you need to on bills.

Need-to-knows
  • You can get 3% cashback on council tax, gas, electricity, water, home phone, mobile, TV and broadband, as long as you pay by direct debit.
  • You'd have to spend at least £100 per month to earn any net profit from the account.
  • You can cash in your rewards as soon as you reach £5, and can take this in the form of cash, vouchers with retailers such as Cineworld and Caffe Nero or a donation to one of four charities (Barnardo's, Cancer Research UK, Macmillan Cancer Support or NSPCC).
  • RBS also offers the same account, though you have to live in Scotland and apply in branch.
  • NatWest has the full £75,000 UK savings safety guarantee.

How NatWest rates on service (in credit)

48% great

35% OK

17% poor

Date: Aug 2016 Voters: 484

Stats box
  • Minimum monthly pay-in: None
  • In-credit interest: None
  • Arranged overdraft cost: £10 buffer, then £6/month fee plus 19.89% EAR interest
  • Unarranged overdraft cost: £10 buffer, then £6/day fee (max charges of £90 per month) plus £6 unpaid item fee (max charges of £60 per month)
Key questions

Is there a catch with the cashback? NatWest has a list of qualifying suppliers (though it's worth checking with it about your suppliers, even if they're not listed). You also need to pay your bills by direct debit from the account to get the cashback – any payments made by, for example, debit card or standing order, won't qualify. The household bills that qualify for cashback do not include fuel and oil, maintenance, insurance, TV licence, on-demand internet streaming services or any commercial contracts.

How much cashback could I really earn? We crunched the numbers on how this stacks up for low, average and high bill payers. After the fee, we worked out low users would be up by £39 a year, average users £82 and high users £179. Plus, our recent poll showed that some people spend even more on their bills, with 1.5% stacking up an annual cashback of at least £324.

Plus, as long as the bills are for personal (not business) use, there is no cap on the cashback amount you can earn, eg, if you pay a child's mobile phone bill or electricity bills on a holiday home from the account as well as your main mobile and electricity bills, you'll also earn 3% back on those, which could boost your earnings.

Our table details how the account works for low, medium and high bill payers.

Are there any other perks? If you hold a Reward Credit Card, the annual fee will be refunded in any year you hold the Reward Current Account. However, it's not necessarily the best reward card, so see our guide for more options.

Santander

Up to 3% cashback on household bills, with a slightly lower fee than NatWest

Santander 123 Lite

The newly launched Santander 123 Lite mirrors the cashback offering of Santander's popular 123 account higher up this guide, but has a lower monthly fee of £1 and doesn't offer any in-credit interest.

It only wins if you pay bills by direct debit, have a Santander mortgage and less than £3,000ish in savings. If not, other accounts in this guide are best.

Need-to-knows
  • You can get cashback on some bills – 3% on phone, broadband, mobile and TV, 2% on gas and electricity and Santander home insurance, 1% on water, council tax and Santander mortgage payments (max £10/mth on mortgage), as long as you pay them by direct debit.
  • Santander only pays cashback in months you've paid in £500+, had two 'active' (so not disused) direct debits, and paid your monthly fee. You also need to log in to online or mobile banking at least once every three months. Watch out, it counts a month from the anniversary of account opening, not a calendar month.
  • You can apply for the account by phone or in branch, and once open it's paperless so you won't get statements through the post.
  • You can have two accounts, but one must be joint.
  • Santander shares its £75,000 UK savings safety guarantee with Cahoot, so don't hold more than £75,000 across the two banks.

How Santander rates on service (in credit & overdrawn)

71% great

23% OK

6% poor

Date: Aug 2016 Voters: 484

Stats box
  • Minimum monthly pay-in: £500 (equates to £6,000 annual salary)
  • In-credit interest: None
  • Arranged overdraft cost: 0% for four months if you switch, then £12 buffer and £1/day
  • Unarranged overdraft cost: £12 buffer then £6/day (max £95/mth)
Key questions

Is there a catch with the cashback? Santander has a list of qualifying suppliers (though it's worth checking with it about your suppliers, if they're not listed). You also need to pay your bills by direct debit from the account to get the cashback.

How much cashback could I really earn? We've crunched the numbers on how this stacks up for low, average and high bill payers. After the fee, we worked out low users would be up by £58 a year, average users £127 and high users £238.

The cashback works best for those who have a mortgage payment of around £1,000 a month with Santander – but even without the mortgage payment, anyone with high bills will be able to make money from this account, even after the fee is covered.

Our table details how the account works for low, medium and high bill payers.

Best buys Top accounts with insurance

These accounts tend to come with insurance, or other perks. But it's worth checking you'll use what the account offers – if not, then you're better off looking at other accounts that reward you in different ways. In this section, we have a free account with free travel insurance, and a paid-for account that could save big bucks.

These are the right accounts to switch to if...

...you're always in credit

...you genuinely need the associated insurance

...you can't get the insurance cheaper elsewhere

These are the wrong accounts to switch to if...

...you are regularly overdrawn

...you don't need the insurance

...you can find the associated insurance cheaper elsewhere

Nationwide

Last chance. FREE annual European travel insurance

Nationwide FlexAccount*

Fancy free travel insurance from your current account? That's what the Nationwide FlexAccount* gives you - as long as you apply for the account by 14 December, as Nationwide is axing the perk for new customers.

Get the account, and pay in at least £750 per month for three months, and free European travel insurance is yours (if you're under 75, £50 if 75+). Plus, it's fairly reasonable to upgrade to worldwide or family travel insurance policies too.

Before applying, weigh up this freebie against the others in this guide - say you can get travel insurance for £20, you might be better off with a free £100 switching bonus.

Need-to-knows
  • To get the free insurance you need to apply by 11.59pm on 14 December 2016.
  • If you have this as a joint account, both of you are covered by the free travel insurance.
  • IMPORTANT - to get the insurance you need to activate it by sending back a medical declaration form. To keep it, pay in £750/mth and tell Nationwide if anything changes with your medical situation. See our Nationwide axes travel insurance perk news story for more.
  • You may not be covered under the insurance if you have pre-existing conditions. Check the policy wording (page 7) before opening the account.
  • You can pay £40/year to upgrade to worldwide cover, or to family cover. If you're over 75, it's £50 for cover. But check our Travel Insurance guide to see if you can get the policy cheaper.
  • If you need instant cover, you can switch your account to this one, using Nationwide's switching service. If you don't want to switch, then cover will kick in once you've paid in £750 for three consecutive months.
  • If you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can refer up to 10 friends a year.
  • Nationwide has the full £75,000 UK savings safety guarantee.
Rated 2nd ribon

How Nationwide rates on service (in-credit)

80% Great

16% okay

4% poor

Date: Aug 2016 Voters: 984

Stats box
  • Minimum monthly pay-in : None (£750/mth if you want the insurance)
  • In-credit interest: None
  • Arranged overdraft cost: 0% for three months (only if you switch); 18.9% EAR
  • Unarranged overdraft cost: £15 buffer; 18.9% EAR interest, plus paid/unpaid item fees (max. £75/month)
Travel insurance stats
Key questions

How good is the insurance? It's got good cover limits and a pretty low £50 excess, and has a five-star rating from Defaqto. You can pay to upgrade to cover worldwide travel, or winter sports holidays, but it's worth checking if you can get this cheaper in our Travel Insurance guide.

If you open this as a joint account, both of you are covered by the insurance – provided you're under 75 – and the policy will automatically renew each year, until your 75th birthday.

If you want the insurance to continue past age 75, you can pay £50 a year (though if you have medical conditions, you may not get this deal).

What happens if my income drops? If your income reduces and you can't pay in £750 per month you won't be eligible for the free travel insurance. You should be notified if you're no longer covered.

Are there any other perks? If you're accepted, you'll be eligible for the Nationwide Select credit card*. It gives 0.5% cashback, cheap overseas spending and other perks, though always pay it off IN FULL every month to avoid the 15.9% rep APR interest.

Nationwide

£600 high-end travel, mobile & breakdown cover but costs £10/mth

Nationwide FlexPlus*

If you're willing to pay a fee for your current account, Nationwide FlexPlus* is another option. Benefits include worldwide travel and mobile phone insurance for the whole family, plus breakdown cover. But – here's the crux – it won't be right for everyone, so check that you'll use enough of the perks to make it worthwhile.

Need-to-knows
  • You have to pay a £10/mth fee to hold the account and get the benefits.
  • You also get a year's extended warranty cover on electricals worth £2,000 or less.
  • You don't need to pay in a minimum amount to get the account.
  • If you're in credit, this account pays 3% interest on balances up to £2,500.
  • If you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can refer up to 10 friends a year.
  • Nationwide has the full £75,000 UK savings safety guarantee.
Rated 2nd ribbon

How Nationwide rates on service (in-credit)

80% Great

16% okay

4% poor

Date: Aug 2016 Voters: 984

Stats box
  • Minimum monthly pay-in : None
  • In-credit interest: 3% AER variable up to £2,500
  • Arranged overdraft cost: Nothing for three months; then, £100 fee-free, 50p per day above that
  • Unarranged overdraft cost: £10 buffer, then £5 per day (max £50/mth)
Insurance questions

How does the travel insurance work? The travel insurance included in this policy is annual, multi-trip, worldwide, family travel insurance and includes winter sports, business, golf and wedding cover. The cheapest you could normally get this for is £50, but for a top value policy like this you could pay over £130 per year (read the full Travel Insurance guide).

Cover is up to age 74, but those over 75 can be covered for a £50 premium. It'll cover you, your partner and children under 19 (or 22 if in full-time education) providing they live at the same address as the account holder.

The excess (the amount you pay towards the claim) is a maximum of £50. If you have a pre-existing condition, tell Nationwide you may need to pay extra or could be declined cover. For policy details, see the travel insurance policy documents.

How does the mobile phone insurance work? It covers repair or replacement after theft, loss or damage, insuring each handset up to the value of £1,000, so it'll cover all smartphones. The excess is a maximum of £100 for an iPhone. Unusually, it covers the phones of all family members, provided they live with you – so maxed out, this gives serious value. See mobile insurance for more details. For more details, see the mobile insurance policy documents.

What does the breakdown policy cover? You're covered for breakdown in the UK and Europe, including home assistance. Cover is for the account holder, and people travelling in the vehicle with you (so, it's not cover for the car). On a joint account, both account holders are covered. For more details, see the UK & Europe breakdown cover documents.

Key questions

What's the deal with the debit card and overseas transactions? The debit card with the account has no fee or load for cash withdrawals abroad, making it a leading debit card for overseas use, but still has a 2% charge when using it for overseas purchases, so don't use it for this.

Are there any other perks? The debit card on the account doesn't charge for overseas ATM withdrawals, but does charge for spending. However, if you're interested in getting the best deal overseas, by holding this account, you're also eligible for the Nationwide Select credit card*.

It gives 0% load on overseas purchases, as well as 0.5% cashback. But, watch out for interest – if your purchases don't fall under the 0% periods, you'll be charged 15.9% rep APR.

Best buys Top accounts if you're overdrawn

Overdrafts are debts, and often they're much more expensive than credit cards, so you need to find an account with the lowest fees possible.

But if you are overdrawn, don't just tackle the symptoms. Also try using the free budget planner, give yourself a money makeover to tackle its causes and check the tips to avoid charges in the bank charges compared tool.

If you've decided that you do want to switch accounts to make your overdraft cheaper, then there are two top picks below:

These are the right accounts to switch to if...

...you're regularly or always overdrawn

These are the wrong accounts to switch to if...

...you're always in credit

First Direct logo

£250 0% overdraft, plus free £100 when you switch to the account

First Direct*

If you just dip in and out of your overdraft, the First Direct* account should cover you for free, as it has a £250 0% overdraft. Plus, when you switch, you get £100 free cash which you could put towards your overdraft to help you pay it off.

Need-to-knows
  • If you go more than £250 into your overdraft, you pay interest of 15.9% EAR, making it one of the lower-cost overdrafts on offer.
  • You need to pay in £1,000+ each calendar month, or maintain an average monthly balance of £1,000 to keep the account free (£10 otherwise).
  • First Direct will pay you a bonus of £100 if you're a new customer switching to its account using its dedicated switching service.
  • If you qualify, the £100 will arrive within 28 days of your switch completing.
  • You can't get the switching bonus if you've ever held an account with First Direct before.
  • First Direct shares its £75,000 UK savings safety guarantee with HSBC, so ensure you don't hold more than £75,000 across the two banks.
Rated 2st ribbon

How First Direct rates on service (overdrawn)

94% Great

4% okay

2% poor

Date: Aug 2016 Voters: 99

  • Minimum monthly pay-in: £1,000 (equates to an annual salary of £13,100)
  • In-credit interest: None
  • Arranged overdraft cost: 0% under £250, 15.9% EAR above that
  • Unarranged overdraft cost: 15.9% EAR, plus £25 per paid item

How do I get the £100 switching bonus? Once you've opened and been accepted for the account, you have three months in which to complete your switch and pay in £1,000. Once you've done that, the £100 bonus will be paid within 28 days.

What if I can't pay in £1,000 every month? If your salary reduces and you can no longer pay in £1,000 per month you'll be whacked with a £10 monthly fee. However, if you have another account with First Direct – savings or a mortgage – then it's waived, so just open a bog standard savings account (this trick excludes the 5% regular savings account), and put the minimum amount in. The fee will also be waived if you maintain an average monthly balance of £1,000 or more.

Can I open two of these accounts? You can open two accounts if the second one is a joint account, but you'll only get the switching bonus once (as it's only for new customers). Plus, opening a joint account financially links you with the other person, so think carefully before doing so.

Nationwide

12 months 0% overdraft – a respite to sort your finances

Nationwide FlexDirect*

If you're often or always in your overdraft, you'll be used to paying interest or charges. But switch to the Nationwide FlexDirect* account, and you get a year's 0% overdraft. It's important that you see this as a respite to try to clear your overdraft, as you do start paying for it (although fees are low-ish) once you've had the account for a year.

If you are switching to this account, there's no guarantee Nationwide will give you an overdraft as large as the one you currently have with your existing bank, as the limit you get is subject to a credit check.

Need-to-knows
  • Never go over your agreed overdraft limit, as charges are a hefty £5 PER DAY if you do.
  • There's no minimum amount that you need to pay in, although if you pay in £1,000 or more a month, you'll get interest for any time you're in credit – 5% on balances up to £2,500 in the first year, then 1% afterwards.
  • If you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can refer up to 10 friends a year.
  • Nationwide has the full £75,000 UK savings safety guarantee.
Rated 3rd ribbon

How Nationwide rates on service (overdrawn)

69% Great

24% okay

7% poor

Date: Aug 2016 Voters: 58

Stats box
  • Minimum monthly pay-in: None (£1,000/mth to get interest)
  • In-credit interest: 5% in year one on up to £2,500, 1% in subsequent years
  • Arranged overdraft cost: Year one: 0%; years two+: £10 buffer, then 50p/day
  • Unarranged overdraft cost: £10 buffer, then £5/day (max £60/mth), £5 paid/unpaid item fee (max £35/mth). Total unarranged fees capped at £95/month.
Key questions

How much will the overdraft cost? For the first year, your overdraft will cost nothing so long as you stay within your limit. After that, you pay 50p per day you're overdrawn (within your limit). So, if you have a limit of £1,500 and owe £1,000, then you'll pay £182.50 if you're overdrawn every day of the year.

Don't bust your overdraft limit, as you'll pay £5 per day plus a charge of £5 for every paid or unpaid item.

So, use the 12 months when your overdraft is at 0% to get your finances in order and avoid future fees. For tips, see Cutting Overdraft Costs.

How do I get the interest? To get interest, you need to pay in £1,000 a month, though you only get interest when you're in credit.

What if I can't pay in £1,000? Nothing happens, you just won't be paid any interest if you're in credit at all that month.

Can I have two accounts? And two overdrafts? You can definitely have two accounts, and can even get two lots of interest – though one of your accounts must be joint to get this. Nationwide say that you may be able to get two overdrafts if you have two FlexDirect accounts, but each would be assessed on its merits, so there's no guarantee.

Ethical bank accounts

Ethical current accounts – where providers behave ethically in terms of the environment, human rights and more – have jumped in popularity. Our main focus always is telling you the top deals based on what the accounts offer, but to match demand we've worked with Ethical Consumer to list the top accounts that also rate highly on their ethics.

These are the right accounts to switch to if...

...you're always in credit.

...you want an account from a provider with an ethical policy.

These are the wrong accounts to switch to if...

...you're regularly or always overdrawn;

...your sole objective is to get the account with the best bonus/interest or the lowest overdraft fees. Some of these accounts are market-leading in their category, but others aren't.

See the chart below for what Ethical Consumer's ratings mean.

Full ethical consumer

Get free travel insurance or cheap foreign spending

Top Rated Ethical Bank Accounts


Other high-scoring ethical providers

Other high-scoring ethical providers include Metro Bank (branches in London/ SE England), Cumberland BS and Coventry BS, though most of these are for locals only.

Cashback sites may pay you for signing up

As an extra boon, members of specialist cashback websites can be paid when they sign up to some financial products. Do check that it's exactly the same deal though, as terms can be different. And remember the cashback is never 100% guaranteed until it's in your account. 

Full help to take advantage of this and pros & cons in our Top Cashback Sites guide.

Want to complain about your bank account?

If your bank's charged you the wrong amount, taken the wrong amount in payment, or its service has been atrocious, then you don't have to suffer in silence. It's always worth trying to call the bank first to see if it can help, but if not...

Free tool if you're having problems

Man complainingThis tool helps you draft your complaint and manage it too. It's totally free, and offered by a firm called Resolver, which we like so much we work with to help people get complaints justice.

If the complaint isn't resolved, you can use Resolver to escalate it to the free Financial Ombudsman Service.

Q&A Bank accounts

  • Is there a way to track down old bank accounts?

  • What if I can't pay a set amount into my bank account every month?

  • I applied for one of these accounts and got rejected. What can I do?

  • What counts as a month to meet the minimum pay-in amounts?

  • How do I find my local branch?

  • How long do transfers take?

  • How long does a cheque take to clear?

  • How long does it take for money I pay in to count towards my balance?

  • What's the difference between a direct debit, standing order and recurring payment?

  • How do I set up a direct debit or standing order?

  • How do I transfer money using a mobile phone number?

  • Is internet and mobile banking safe?

  • How does it work with reward payments and tax?