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The MoneySaving Forum: join to chat & swap tips with other MoneySavers. Learn how in the Forum Introduction Guide

Best Bank Accounts Up to 5% interest or £100 bonus

Find out YOUR right account type

To ensure you get the account that's cheapest or most rewarding for you, it’s vital to work out what kind of customer you are. Consider your history and peruse your last few statements. This’ll tell you which type of account to plump for.

How switching works

Switching bank accounts

Switching accounts is quick, easy, and - for the majority - completely pain-free. It takes seven working days, and all your incoming and outgoing payments will be moved to your new account, by your new bank. They'll even close your old account for you.

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.

Find out more with our key facts:

Seven working-day switching feedback

We recently did an unscientific Facebook poll into how people had found switching. The majority had a good experience, with 70% reporting that switching was glitch free.

The other 30% had issues with their switch. The most common were that the switch took longer than was advertised, or there were issues with direct debits being switched over.

If you're unsure about taking the plunge and switching to a new account, maybe the feedback below will inspire you to think twice:

After 50+ years with HSBC, changed to Halifax. Had no problems and gained a bit of moneyValeria, via Facebook

Transferred from Barclays to Halifax. Very easy. Not a single problem. Took 7 days. Would recommend (as Halifax credited the £100 a few days after the switch! ! -and are still paying me £5 every month too!!) Loyalty doesn't pay.....but Halifax do!

mark via Facebook

However, switching can and does go wrong, sometimes, as Vicky fed back...

Switched in April, at least 3 direct debits didn't transfer! My daughter nearly lost her place at swimming lessons and my pet insurance was cancelled due to 'none payment'. Absolute headache. Nowhere near as simple as it was made out to be!

Vicky via Facebook

As we've said, the majority of switches are glitch free. But the best idea to mitigate against it is to keep your eye on how the switch is going. That way, you can try to jump in before payments are missed, or at least know that they're missed so you can make manual payments until the switch is sorted.

Please tell us about your switching experience in the forum discussion.

Will I get a new account?

Two things matter...

  • The credit check. You must pass a credit score. If you've been rejected regularly, consider a Basic Bank Account.

  • Minimum monthly income. Most accounts need a certain amount paid in every month. It can come from any source - salary, pension, other earnings - though it effectively sets a minimum earnings threshold. A £1,000/month pay-in equals a £13,400 pre-tax salary.

    This needn't stay in the account, nor must you be in credit. So with some work, you can cheat this rule. Withdraw some money each month and pay it back in. If you earn £900 a month, pay your salary in, withdraw £100 and re-deposit it.

It's also worth noting that sometimes you can get extra cashback by signing up via special websites. See Top Cashback Sites for a full explanation and how to find which sites pay most. If you use travel, breakdown and mobile cover, see if a packaged account could save you money.

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Best buys: Top interest-paying accounts

If you never enter your overdraft, focus on earning the most interest on your positive balance. Most accounts only pay interest on a limited amount, so sweep the rest of this cash into the Top Savings Accounts to maximise your interest.

Before you do, know that it's totally legit to hop about bank accounts, and it's easy to do if they don't require you to link your direct debits and standing orders. To boost your savings rates, set up a monthly standing order from your normal bank account for the required amount, then move it back the next day. See our 5% Savings Loophole guide for a step-by-step guide on how to do this.

NB. Most accounts require a minimum level of monthly income to be paid in, and all require a credit check.


Santander

Up to 3% interest & cashback on bills* Santander: pay £2/mth fee for cashback - check it's worth it

  • Min monthly income
  • £500
  • Apply*
  • In-credit interest: 1% AER if you've £1,000-£1,999.99; 2% if you've £2,000-£2,999.99; 3% if you've £3,000 - £20,000 (on entire balance)
  • What counts as a month? Monthly anniversary from date a/c opened
  • Cashback: 1% on water, council tax & Santander mortgage, 2% on gas & elec, 3% on phone (incl. mobile), internet & TV packages
  • Arranged overdraft cost: £1/day, 0% for 4mths after switching
  • Unarranged overdraft fees: £6/day (max £95/month)
  • Need to switch direct debits? Yes, minimum two direct debits.
2nd
Customer services poll
123 Acc (not whole bank)(in credit)
Great Santander 81%
OK Santander 17%
Poor Santander 2%
Date: Aug 2014 | Voters: 1,158

The Santander* 123 Account charges a £2 per month fee, but switch to it and pay in £500/mth to get interest that beats the current top savings accounts - 3% on the whole balance for those with £3,000 to £20,000 - plus cashback up to 3% on bills paid by direct debit. See below for full details.

We crunched the numbers, and a 'typical' billpayer with a Santander mortgage could make £115/year profit, before interest. Without a mortgage this drops to £50 - click below to see the full analysis of how much you can save. Big spenders can make almost £20/mth, as @KellyAJackson tweeted:

"I have a 123 account and I'm getting about £18 per month back after my fee - it's fantastic. £6 just for paying my mortgage."

Get 3% back on petrol spending too

There’s also a Santander 123 credit card* which pays 3% cashback on petrol, 2% in department stores and 1% in supermarkets. See full list of how much cashback you'll earn in which stores.

It has a £24 annual fee, but if you get the 123 bank account and set up a direct debit from the account to pay your card, this is rebated in the first year. Of course set up the the direct debit to pay the card IN FULL each month or its 16.5% representative APR. For full details see Petrol Credit Cards.

Lloyds

Up to 4% AER on £5,000*Lloyds: 4% interest and access to 4% regular saver

  • Min monthly income
  • £1,500
  • Apply*
  • In-credit interest: 1% under £2,000, 2% from £2,000-£4,000, 4% from £4,000 to £5,000 (on entire balance)
  • What counts as a month? Calendar month
  • Arranged overdraft cost: Up to £100 fee free, then 19.94% EAR + £6/mth fee
  • Unarranged overdraft fees: £10 buffer, then £5/day under £25, £10/day for £25+ (max £80/mth), £10 unpaid item fees (max 3/day).
  • Need to set up/switch direct debit or standing order? Yes, minimum two direct debits.
Customer services poll (In credit)
Great Lloyds Great 48%
OK Lloyds OK 39%
Poor Lloyds Poor 13%
Date: Aug 2014 | Voters: 590

The Club Lloyds* current account is one of the top interest payers, giving 4% AER interest on the whole balance if you have a spare £4,000 or £5,000 to put and keep in the account. However, the account requires you to pay in £1,500/mth (£5 fee if you don't) so it's not available fee-free to all.

The account also gives holders access to a 4% monthly savings account, and discounts on Lloyds' mortgage range.

TSB

5% AER on up to £2,000*TSB Classic Plus Account

  • Min monthly income:
  • £500
  • Apply*
  • In-credit interest: 5% from £1 to £2,000
  • What counts as a month? Calendar month
  • Max number of accounts: One single and one joint
  • Arranged overdraft cost: Up to £100 fee free, then 19.94% EAR + £6/mth fee
  • Unarranged overdraft fees: £10 buffer, then £5/day under £25, £10/day for £25+ (max £80/mth), £10 unpaid item fees (max 3/day).
  • Interest requirement: £500 monthly deposit. Register for online banking and paperless statements
  • Need to set up/switch direct debit or standing order?: No
Customer services poll (In credit)
Great TSB Great 52%
OK TSB OK 36%
Poor TSB Poor 12%
Date: Aug 2014 | Voters: 210

The TSB Classic Plus* current account is one of the top interest payers, giving 5% AER interest up to £2,000. There are no extra perks so if you want benefits from your current account, you're better looking at other accounts above and below.

Unusually, you don't have to switch bank accounts or set up any direct debits on the account to get the interest. But you will need to pay in £500/month and register for online banking with paperlesss statements.

Nationwide

5% in-credit interest plus 12 mth 0% overdraft*Nationwide: pay in £1,000/mth to get top interest rate

  • Min monthly income
  • £1,000
  • Apply*
  • In-credit interest: 5% up to £2,500 in yr 1, 1% after
  • What counts as a month? Calendar month
  • Arranged overdraft cost: 0% 1st 12/mths, 50p/day after
  • Unarranged overdraft fees: £5/day (max £60/mth), £5 paid / unpaid item fees (max £35/mth). Total unarranged fees capped at £95/month
  • Need to set up/switch direct debit or standing order?: No
4th
Customer services poll (In credit)
Great Nationwide 69%
OK Nationwide 26%
Poor Nationwide 5%
Date: Aug 2014 | Voters: 881

Nationwide's* FlexDirect account is good in the first year as it gives 5% in-credit interest on balances up to £2,500 for the first year, and has an interest free overdraft too.

But both these perks end after the first year, with interest dropping to 1%, and the overdraft costing 50p per day, so you may find yourself wanting to switch again to a different bank account in a year's time.

Alternative in-credit interest & Reward accounts

Bank of Scotland and Tesco Bank also give in-credit interest, but pay less than the accounts above and have few additional perks. You must deposit £1,000/calendar month with Bank of Scotland to be eligible for the interest. You need to pay in £750/statement period month with Tesco or you'll be charged £5/mth account fee.

Gross
Max balance
Interest earned/year (pre-tax) (1)
After basic rate tax
Need to set up direct debit or standing order?
Additional details
Bank of Scotland*
2.96%
£5,000
£148
£118
No
-
Tesco Bank
2.96%
£3,000
£89
£71
No
Earn 1 Clubcard point per £4 in Tesco & 1 per £8 elsewhere (2)

(1) This is the approx gross interest you’d earn if you were to hold the max balance. As each month’s interest will take you over the maximum balance, the AER advertised by providers doesn’t apply, as this assumes interest compounds. (2) This is on top of normal Clubcard points.

Best buys: Top accounts with switching bonus

There are also several accounts that offer you a bribe to switch to them. Many pay cold hard cash, others offer vouchers. We've analysed the best here. NB Most accounts have a minimum pay-in per month to get the bonus, so make sure you can afford that.

First Direct

Top for customer service plus £100 bonus* First Direct: 6% linked savings plus small 0% oVERdraft

  • Min monthly income
  • £1,000
  • Apply*
  • In-credit interest: NONE
  • What counts as a month? Calendar month
  • Arranged overdraft cost: 0% up to £250, 15.9% above that
  • Unarranged overdraft fees: £25 paid item fee or bounced payment fee of £0, £10 or £25
  • Need to set up/switch direct debit or standing order? Need to switch, no minimum.
1st
Customer services poll (In-credit)
Great 92%
OK 6%
Poor 2%
Date: Aug 2014 | Voters: 845

First Direct* gives £100 to new customers switching to it.

A lot of people choose First Direct for its unrivalled customer service - it's won every poll we've ever done on banking service, with 92% of customers in credit rating it great.

To keep the account free, you need to pay in a minimum of £1,000 per month (equivalent to a £13,300 pre-tax salary), and you must switch using First Direct's switching service. If you can't pay in that much, you'll be charged a £10 a month fee, but there are ways to avoid it - read our full information on this account for a how-to.

It pays no in-credit interest, but does have a big 6% savings offer for its 1st Account customers, if you can save every month - our Regular Savers guide has full details. There's also a £250 0% overdraft - and you get these whether you pay in £1,000 or not.

But if it's just the cash you're after then the Halifax Reward account below offers the same switching bonus, plus £5 monthly 'interest'.

Clydesdale

Free £150 for switchers* Clydesdale: biggest switching offer we've seen

  • Min monthly income
  • £1,000
  • Apply*
  • In-credit interest: 2% on balances up to £3,000
  • Arranged overdraft cost: £6/mth usage cost, plus 9.9% EAR (variable)
  • Unarranged overdraft fees: £10 buffer; then £6/day. £15 unpaid item fee. Max fees: £100/mth
  • Need to set up/switch direct debit or standing order? No. But must fully switch accounts.

The Current Account Direct from Clydesdale* banks currently pays you £150 to switch to it, which is the biggest offer we've seen.

Or, if you prefer, exactly the same account is available from sister Yorkshire Bank*, which also offers the £150 to switch.

But is the account any good?

It's not bad, as it pays you 2% interest on the first £3,000 you have in the account, but this can be beaten, if interest is what you're looking for. However, you have to take the £150 switch bonus into account, which is equal to three years' interest on the full balance.

How do I get the account?

It's not straightforward.

From the links above, you need to go to the box on the right on the page you land on, titled "compare our accounts". You'll then see a list of accounts; make sure you pick the "Current Account Direct", as this is the one that pays you interest too. Then, finally, once you're on the account page, you can click to make either a phone or branch appointment to open the account.

Halifax

£100 switch bonus + long-term £5/mth *Halifax: monthly 'interest' but high overdraft fees

  • Min monthly income
  • £750
  • Apply*
  • In-credit interest: £5/month (AFTER tax)
  • What counts as a month? Calendar month
  • Arranged overdraft cost: Up to £2k: £1/day. £2k-£2,999: £2/day. Over £3k: £3/day; £50 buffer
  • Unarranged overdraft fees: £5/day
  • Need to set up/switch direct debit or standing order? Yes, minimum two direct debits.
Customer services poll
Reward Acc (not whole bank) (In-credit)
Great 62%
OK 35%
Poor 3%
Date: Aug 2014| Voters: 448

Switch to Halifax's* Reward account and you'll get a £100 bonus, if you use its switching service.

This account's unusual in that it gives both a switching bonus, and ongoing benefits - you get a flat £5 'interest' each month you deposit £750, remain in credit and pay out at least two direct debits.

Co-op

£100 switch bonus + good service* Co-op: Gives additional £25 switching bonus to charity

  • Min monthly income
  • £800
  • Apply*
  • In-credit interest: None
  • What counts as a month? Within 31 days of a/c opening
  • Arranged overdraft cost: Set-up cost £20/year (doesn't apply under £200), 18.9% EAR
  • Unarranged overdraft fees: £20/month service charge plus £15 unpaid item fee
  • Need to set up/switch direct debit or standing order? Yes. Minimum of two.
3rd
Customer services poll (in-credit)
Great 71%
OK 22%
Poor 7%
Date: Aug 2014 | Voters: 263

The Co-operative Bank* gives new customers switching to it a £100 bonus for themself and £25 to charity.

This account also scores well for customer service: Co-op came third in our most recent bank customer service poll, with 71% of its customers rating it 'great'.

You need to pay in £800 within the first month to get the switching bonus. Keep this pay-in up and you also get a small £200 fee-free overdraft, though you'll still pay interest on your overdraft.

I've heard a lot about Coop Bank - lots of scandal & it's unstable? We have to highlight recent scandals, solvency worries and the fact it's now 70% privately-owned.

You need to decide where you stand on the ethics of the bank, but the key fact on solvency is the first £85,000 of savings per person in the combined group (Co-op Bank, Smile, Britannia) is guaranteed by the Government-backed FSCS. This includes money in your current account. For how this works, see the full Savings Safety guide.

First Direct

Free £100 M&S gift card* marks and spencer: no minimum monthly pay-in

  • Min monthly income
  • NONE
  • Apply*
  • In-credit interest: NONE
  • Rewards points: 1 point per £1 spent in M&S
  • Arranged overdraft cost: 0% up to £100, 15.9% EAR above that
  • Unarranged overdraft fees: Not applicable - M&S will only allow you to go £50 into your unarranged overdraft. 15.9% EAR interest applies.
  • Need to set up/switch direct debit or standing order? No. But must fully switch accounts.

The Marks & Spencer* current account gives a £100 M&S gift card to new customers switching to it. Go for this account, and you also get 1 reward point for every £1 spent at M&S, so it's good if you're a die-hard M&S shopper.

But is the account any good otherwise? While decent for regular M&S shoppers you'll need to spend £500 a month there for it to beat Halifax for basic-rate taxpayers, and its bank service is untested compared to First Direct.

One boon though - most banks require you to pay in a minimum amount each month, this doesn't. Plus, if you're approved for the account, you'll get an automatic £500 overdraft, the first £100 of which is interest free.

Best buys: Top accounts with other perks

These accounts tend to come with free insurance, or other perks. We've also included one paid for account in here - while not free, it does come with £600 of benefits for £120 a year - good, IF you'll use them. Again, watch for minimum pay-ins to get the accounts.

Nationwide

FREE annual European travel insurance*Nationwide: pay in £750/mth for year-long travel cover

  • Min monthly income
  • £750
  • Apply*
  • Bank account
  • In-credit interest: NONE
  • What counts as a month? Calendar month
  • Arranged overdraft cost: 3 months fee-free then 18.9% EAR
  • Unarranged overdraft fees: £15 paid / unpaid item fees, £20 usage fee (max £95/month)
  • Need to set up/switch direct debit or standing order? No
  • Travel insurance
  • Cancellation: £5,000 (£50 excess)
  • Personal baggage: £1,500 (£50 excess)
  • Medical: £10m (£50 excess)
  • Full info: Key Facts PDF Policy Wording PDF
4th
Customer services poll (In credit)
Great Nationwide 69%
OK Nationwide 26%
Poor Nationwide 5%
Date: Aug 2014 | Voters: 881

Nationwide's* FlexAccount's main benefit is that it gives free European travel insurance provided you can pay in £750+ per month.

The insurance covers everyone up to age 74, plus you can pay £40 a year to upgrade it to worldwide, or £40 to family cover. If you're over 75, it's £50.

If you have a pre-existing condition, contact Nationwide as you may need a medical before getting cover and a charge could apply. This account is also one of our top pick packaged accounts.

Best fee-paying bank account

This is just what we regards as the best fee-paying bank account, but it may not be the best one to suit your needs. See our Premier Current Accounts guide for a full overview.

Nationwide

£600 of high-end travel, mobile & breakdown for £120*Nationwide: £10/mth fee for lifestyle cover

  • Monthly fee
  • £10
  • £120
    year
  • Apply*
  • In-credit interest: 3% AER up to £2,500
  • What counts as a month? Calendar month
  • Min monthly income: None
  • Arranged overdraft cost: £100 fee-free, 50p per day above that
  • Unarranged overdraft cost: Up to £10 fee-free, then £5 per day (max £50/mth)
  • Need to set up/switch direct debit or standing order? No.

Nationwide's* FlexPlus is a packaged account where you pay a monthly fee and get 'free' insurance policies. It's one of our top picks - to see how it compares, see our Packaged Bank Account Analyser tool.

If you choose this account, you pay £120 a year for insurance for your family's smartphones (including iPhone 5), worldwide family travel insurance up to age 74 (usually costing double the account price alone) and UK & Europe breakdown cover. It's a lot cheaper than paying separately - IF you'll use the features.

Plus it comes with extended warranty cover for an additional 12 months on all new household electrical items between £50-£2,000. You'll also get 3% AER in-credit interest on balances up to £2,500, beating top savings accounts.

Specialised alternatives

  • Can't pay in a set amount each month?

    The Halifax* Reward account doesn't need regular monthly deposits, but unless you sometimes pay at least £750 in, you'll never earn any interest.

    This account requires you to have a good credit score, so is suitable for those who have wealth but not those struggling. If that's the case, you can also try...
  • Basic bank accounts

    These don't credit score you (though you need ID) as they don't offer overdrafts. Make sure you ask for their application forms, or you'll get standard ones for standard bank accounts, and then be rejected. Full help and tips in our Basic Bank Accounts guide.
  • Credit unions:

    Fed up with banks? Some of the 500 credit unions across the UK offer bank accounts (all do savings & loans). There's the same £85,000-per-person protection as banks. Find your nearest and full info in our Credit Unions guide.

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Best buys: Top if you go overdrawn

0% overdraftOverdrafts are debts, and often they’re much more expensive than credit cards. So avoiding being overdrawn is always a good policy. The costs below strictly refer to going overdrawn within your limit. If you go beyond, you’ll pay through the nose.

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.

Read our top overdraft need-to-knows before you start:

Try shifting the debt to a 0% credit card

Spend on a 0% for purchases card instead of a debit card/taking cash out

Keep maximum money in your account, for as long as possible

Check if your account has an overdraft buffer?

Get text alerts of when you are over your limit



First Direct

Small 0% overdraft if income's £1,000+/mth*First Direct: £100 intro bonus, only interest-free to £250

  • Min monthly income
  • £1,000
  • Apply*
  • In-credit interest: NONE
  • What counts as a month? Calendar month
  • Arranged overdraft cost: 0% up to £250, 15.9% above that
  • Unarranged overdraft fees: £25 paid item fee. No unpaid fees
  • Need to set up/switch direct debit or standing order? No.
1st
Customer services poll(Overdrawn)
Great 89%
OK 9%
Poor 2%
Date: Aug 2014 | Voters: 88

The First Direct* 1st Account has a permanent £250 0% overdraft. Interest charges shoot up to 15.9% EAR above that. New customers who apply through this First Direct* link also get a £100 intro bonus, provided they meet switching & income criteria.

First Direct has come top in every customer service poll we've done, including our latest in August 2013.

Nationwide

12mths 0% overdraft*Nationwide: 5% in-credit interest

  • Min monthly income
  • None
  • Apply*
  • First year overdraft: 0% EAR
  • Arranged overdraft cost: 50p/day after year one
  • Unarranged overdraft fees: £5/day (max £60/mth), £5 paid/unpaid item fees (max £35/mth). Total unarranged fees capped at £95/month
  • In-credit interest: 5% in year one on balances up to £2,500, 1% in subsequent years (must deposit £1,000/month to receive interest)
  • Need to set up/switch direct debit or standing order? No.
4th
Customer services poll (Overdrawn)
Great Nationwide 70%
OK Nationwide 16%
Poor Nationwide 14%
Date: Aug 2014 | Voters: 73

Nationwide's* FlexDirect account has a 0% arranged overdraft for the first 12 months, and reduced fees of 50p/day for arranged overdrafts after that.

Never stray more than £10 over your arranged overdraft limit, as there's a £5/day charge for each day you're over, capped at £60/mth. Nationwide'll also charge you £5 for each paid & unpaid use of the account.

There's no minimum monthly income needed to get the 12-month 0% overdraft, however, if you pay off your overdraft and get into credit, then you need to pay in £1,000 monthly to get any interest paid on your balance.

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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.

Free travel insurance with ethical bankOr cheap foreign spending

See the chart on the right for what Ethical Consumer's ratings mean.EthicalConsumerScale

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.

Switched bank before?

In the UK, old, now-dormant accounts hold billions of pounds that lay unclaimed - including money from deceased relatives. It's straightforward to get it back, we've full details in the Reclaim Forgotten Cash guide.

Join in the Forum Discussion:
Best Bank Accounts
If you haven't already

What the * means above

If a link has a * by it, that means it is an affiliated link and therefore it helps MoneySavingExpert stay free to use, as it is tracked to us. If you go through it, it can sometimes result in a payment to the site. It's worth noting this means the third party used may be named on any credit agreements.

You shouldn’t notice any difference and the link will never negatively impact the product. Plus the editorial line (the things we write) is NEVER impacted by these links. We aim to look at all available products. If it isn't possible to get an affiliate link for the top deal, it is still included in exactly the same way, just with a non-paying link. For more details, read How This Site Is Financed.

Duplicate links of the * links above for the sake of transparency, but this version doesn't help MoneySavingExpert.com: Bank of Scotland, Clydesdale Bank, First Direct, Halifax, Leeds BS, Marks & Spencer, Nationwide FlexAccount, Nationwide FlexDirect, Nationwide FlexPlus, Nationwide Select Credit Card, Santander 123, Tesco Bank, The Co-op Bank, TSB

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