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Best Bank Accounts

Up to 5% interest or £150 bonus

Millions languish on dire accounts that pay pitiful rates of interest, come with sky-high fees or offer shockingly bad service. But don't bitch – just switch! Banks are salivating for business, pushing out lucrative perks for switchers.

This is a full guide on how to switch accounts, what the best deals are and what sort of account is right for you.

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.

Under the new scheme, a switch takes seven working days, all your incoming and outgoing payments 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?

Are recurring payments from my card also moved?

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 £13,200/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 buy without a minimum pay-in is the M&S account. It gives a free £100 M&S gift card to switchers, plus a £100 0% overdraft and 6% linked regular saver.

Top bank accounts (ranked by minimum pay-in)
Account Minimum pay-in per month Equivalent salary needed
M&S Bank - -
Santander £500 £6,000
TSB Classic Plus £500 £6,000
Norwich & Peterborough £500 £6,000
Halifax Reward £750 £9,150
Nationwide FlexAccount £750 £9,150
Co-op Bank £800 £9,850
First Direct £1,000 £13,200
Clydesdale Bank £1,000 £13,200
Nationwide FlexDirect £1,000 £13,200
Club Lloyds £1,500 £22,000
HSBC Advance £1,750 £26,400

Can I jemmy the pay-in? 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.

Which pays more, £150 free intro cash, or 5% savings interest?

The vast majority of accounts in this guide fall into one or two categories. The first lot pay interest on specified amounts of cash in the account. The second lot pay you a one-off bonus of £100-£150 to switch to them. But which type's better for you?

As a rough rule of thumb, if you've got £10,000+ that you're happy to keep in a current account, then Santander 123 always wins, as it pays interest on amounts up to £20,000 – four times more than the next best account.

Below that, it's close, and which wins all depends on how often you're likely to switch and what rate of tax you're paying.

You could switch annually (or more often) to keep bagging free £100s. To earn more than £100 in bank savings, you need £3,000+ saved for a year. Yet if you only want to switch once, then it's likely interest-paying accounts win, as they pay year after year.

Saying that, the switching bonuses are paid tax-free, whereas you pay tax on any interest earned. So £100 free cash will always be £100, but £100 of interest is worth £80 when you get it (or £60 if you're a higher-rate taxpayer).

Quick question

I heard something about the Government scrapping tax on savings – will that make interest-paying accounts even better?

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, so anyone can 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 £25 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

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 £85,000-per-person protection for your cash as banks (falling to £75,000 on 1 January 2016), 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 current accounts that pay you interest

Just a few years ago, almost all UK current accounts paid you absolutely no interest, but that's all changed as some deals smash the best buy savings rates in an attempt to get you through the door and then sell you other products (you don't have to buy them).

Here are the top deals (also see our 60-sec guide on how to save up to £19,000 at up to 5% by opening multiple versions of these accounts):

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 returns below.

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

Santander 123*

If you've a decent chunk of cash to save, Santander 123* is the only bank account which pays strong rates on a decent whack. You get 3% interest if you've £3,000 to £20,000 in it.

It has a £2/month fee but for most that's more than covered as it also pays up to 3% cashback on utility bills paid by direct debit from the account.

Need-to-knows
  • You only get the 3% interest if you've £3,000-£20,000 in the account. If you've £2,000-£2,999 it's 2%, and for £1,000-£1,999 it's 1%. Rates apply to the entire balance.
  • Get cashback on some bills - 3% on phone, broadband, mobile & TV, 2% on gas & electricity, 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 direct debits paid out and paid your monthly fee. Watch out, it counts a month from the anniversary of the account opening, not a calendar month.
  • You can have two accounts but one must be joint.
  • Santander shares its £85,000 UK savings safety guarantee with Cahoot, so don't hold more than £85,000 across the two banks.

How Santander 123 rates on service (in credit)

80% Great

18% okay

2% poor

Date: Feb 2015 Voters: 1,747

Stats box
  • Minimum monthly pay in : £500 (equates to an annual salary of £6,000)
  • In-credit interest: 3% AER variable if you've £3,000 to £20,000; 2% under £3,000; 1% under £2,000; nothing below £1,000
  • Arranged overdraft cost: 0% for four months after switching, then £1/day
  • Unarranged overdraft cost: £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 2.96% - 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 £600 interest in a year that you'd get if the interest could compound, you'd only get £592.

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 £47 a year, average users £115 and high users £226, 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.

How does opening two accounts work? 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, their credit record affects yours.

However, getting a joint account is great if you have up to £40,000 in savings and/or you have a second home with separate bills.

You'll have to pay the £2 monthly fee on both accounts but the interest gains could make this relatively insignificant. But you'll need still need to satisfy the £500/month pay-in requirement (you need to pay in from outside Santander). You must also have at least two direct debits set up on each account.

Are there any other perks? There's also a 123 credit card which gives cashback on other bills incl, petrol & supermarket shopping. It has an annual fee of £24, but if you have the current account, this is rebated in the first year. For full details see petrol credit cards.

Plus, Santander often has boosted savings rates for 123 bank account holders.

Club Lloyds Bank Account

Get 4% interest if you have £4,000-£5,000

Club Lloyds*

If you don't have £20,000 to leave in your current account, the Club Lloyds* account is the next best option in terms of the amount of interest you can earn. However, watch out as you'll only get the top 4% rate if you have between £4,000 to £5,000 in the account. Slip below this, and the rate of interest you get is halved.

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.
  • You need to have two or more direct debits going out each month to get the interest.
  • Lloyds shares its £85,000 savings safety guarantee with Cheltenham & Gloucester, so don't hold more than £85,000 across the two banks.

How Lloyds rates on service (in credit)

49% Great

40% okay

11% poor

Date: Feb 2015 Voters: 809

Stats box
  • Minimum monthly pay in : £1,500 (equates to an annual salary of £22,150)
  • In-credit interest: 4% AER 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
  • Arranged overdraft cost: Up to £100 fee free, then 19.94% EAR + £6/mth fee
  • Unarranged overdraft cost:£10 buffer, then £5/day under £25, £10/day for £25+ (max £80/mth), £10 unpaid item fees (max 3/day).
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, that you'd get if the interest could compound, you'd only get £196.50.

Bear in mind this is pre-tax, so you'd need to pay tax at your prevailing rate on it - basic-rate taxpayers would get £157.

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 a regular savings account, paying 4%, plus discounts on Lloyds mortgage range.

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.

TSB Classic Plus

Huge 5% but only on up to £2,000

TSB Classic Plus*

The TSB Classic Plus* account is great if you're not a fan of leaving too much cash in your current account, but want to be rewarded for what is there. It pays a massive 5% on the first £2,000 in your account, making it the top account for lower sums.

Need-to-knows
  • 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 register for internet banking & opt for paperless statements to get the interest.
  • TSB has the full £85,000 UK savings safety guarantee.

How TSB rates on service (in credit)

58% Great

35% okay

7% poor

Date: Feb 2015 Voters: 379

Stats box
  • Minimum monthly pay in : £500 (equates to an annual salary of £6,000)
  • In-credit interest: 5% AER under £2,000
  • Arranged overdraft cost: Up to £25 fee free, then 19.94% EAR + £6/mth usage fee
  • Unarranged overdraft cost: 19.94% EAR. There's a £10 buffer, then £5/day under £25, £10/day for £25+ (max £80/mth); £10 unpaid item fees (max 3/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.

But, being clever, because this account pays such a high rate of interest, no other account actually gives you more than £97.80 until you have £3,250 to keep in it. So, if you're never going to keep more than that in your current account, then you could opt for this account and put any extra spare cash in a savings account.

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.

'Best of the rest' interest-paying bank accounts

Nationwide, Bank of Scotland and Tesco Bank also give in-credit interest, but pay less than the accounts above and have fewer additional perks.

You must deposit £1,000 each calendar month with Nationwide and Bank of Scotland to be eligible for the interest. If you're opting for the Tesco Bank account, you need to pay in £750 per statement period month or you'll be charged a £5 per month account fee.

More accounts paying in-credit interest
Provider Interest (AER) Interest (gross) Max balance Max interest per yr (pre-tax)(1) After basic-rate tax Additional perks
Nationwide* 5% but only for a year; 1% after 4.89%; 1% £2,500 £122.50; £25 £98; £20 -
Bank of Scotland 3% 2.96% £5,000 £148 £118 -
Tesco Bank 3% 2.96% £3,000 £89 £71 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 bonuses

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. 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.

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 above

...you want quick-ish cash for something

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

...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*

Of the accounts offering you £100 to switch, First Direct* is our top pick, for its excellent customer service. It's won every bank service poll we've ever done, with 92% of its customers rating it 'great' - only 2% said they got poor service. You also get a small 0% overdraft, and can open a linked 6% regular saver.

Need-to-knows
  • To get the £100 switching bonus, you need to use First Direct's switching service to fully switch and close your current account.
  • This account has a £10 monthly fee, but this is waived each month you either pay in £1,000 each month, have an average monthly balance of £1,000 or hold another account with First Direct.
  • First Direct shares its £85,000 UK savings safety guarantee with HSBC, so ensure you don't hold more than £85,000 across the two banks.

How First Direct rates on service (in credit)

92% Great

6% okay

2% poor

Date: Feb 2015 Voters: 1,359

Stats box
  • Minimum monthly pay in : £1,000 (equates to an annual salary of £13,200)
  • 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
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 (including the transfer of your salary of at least £1,000 a month). 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 6% 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.

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 6% regular savings account.

Clydesdale Bank Current Account

Free £150 for switchers, plus get 2% interest on your balance

Clydesdale Bank*

The Current Account Direct from Clydesdale* banks currently pays you £150 to switch to it, which is the biggest offer we've seen. However, there aren't many branches (unless you live in Scotland), so you'll need to be happy to operate the account by phone or online.

Need-to-knows
  • Sister Yorkshire Bank* has exactly the same account, and also offers £150 to switch to it.
  • You get 2% AER interest on the first £3,000 you have in the account.
  • You must have at least two direct debits to switch across to this account.
  • You need to phone Clydesdale to open the account. Make sure you choose the Current Account Direct, as this is the one that pays the ongoing interest.
  • Clydesdale Bank and Yorkshire Bank share the £85,000 UK savings safety guarantee, so don't hold more than £85,000 across the two.

How Clydesdale & Yorkshire rate on service (in credit)

43% Great

40% okay

16% poor

Date: Feb 2015 Voters: 283

Stats box
  • Minimum monthly pay in: £1,000 (equates to an annual salary of £13,200)
  • In-credit interest: 2% AER on balances up to £3,000
  • Arranged overdraft cost: £6/mth usage cost, plus 9.9% EAR (variable)
  • Unarranged overdraft cost: £10 buffer; then £6/day. £15 unpaid item fee. (Max. £100/mth)
Key questions

There's no branch near me. Does that matter? The Current Account Direct is set up so that for the vast majority of transactions, you'll be able to use phone and internet/mobile banking, meaning it's unlikely you'll actually need to go into a branch. This is good, as Clydesdale and Yorkshire Banks are less widespread than many other banks (although if you're in mainland Scotland or Yorkshire, you won't have too much of a problem).

However, the online nature of the account makes it all the weirder that you need to open the account by phone or in branch.

When do I get the bonus? You need to use Clydesdale or Yorkshire's Current Account Switch Service to fully switch your current account, including at least two active direct debits. Once you've started the switch, you must choose a completion date within 31 days. Once the account's opened, you have to pay in £1,000 within 31 days of the switch completing.

Once you've done this, the £150 switch bonus will be paid within 70 days, though you will need to keep the £1,000/mth pay ins up.

How does the overdraft work? The agreed overdraft interest rate of 9.9% EAR is one of the cheaper ones on the market. But, the unplanned overdraft charges £6/day while you're in it, plus £15 per unpaid item. With charges like this, NEVER EVER bust your overdraft limit.

Halifax Reward Bank Account

Free £100 cash + long-term £5 per month

Halifax Reward*

Unusually for an account that pays a switching bonus, Halifax Reward* also pays an ongoing £5 per month 'interest', though there are several criteria you have to fulfil to get it. This is one of the few accounts that offer both a switching bonus, and interest, while you hold the account.

Need-to-knows
  • You need to use Halifax's switching service to get the £100 switching bonus.
  • To get the £5/mth 'interest', 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.
  • Halifax shares its £85,000 UK savings safety guarantee with the rest of the HBOS group, so don't hold more than £85,000 across the group.

How Halifax Reward rates on service (in credit)

63% Great

32% okay

5% poor

Date: Feb 2015 Voters: 679

Stats box
  • Minimum monthly pay in : £750 (equates to an annual salary of £9,200)
  • In-credit interest: £5/mth (after basic-rate tax)
  • Arranged overdraft cost: £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, in order 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. Halifax tells us the monthly £5 payment is ‘interest after basic-rate tax’, so non- or higher-rate taxpayers should claim extra or pay more via tax returns (see Interest Rates Guide).

Can I get more rewards? If you're accepted for this account, you can also apply in branches or by phone for a Halifax Rewards Clarity credit card, which pays £5 every month you spend over £300 on it, and is also a top Travel Money card (as it doesn't charge for overseas transactions). However, you may be able to beat the £5/mth return with a Top Cashback Card.

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.

HSBC Bank Account

Free £120 if you switch PLUS another £120 if you save

HSBC Advance*

HSBC has launched a £120 switching bribe. Yet combine this bribe with what HSBC pays you to save in its cash ISA, and – at £240 – it's by far the biggest cash bonus we've seen. But there's a high minimum pay-in of £1,750 to qualify for the account. If you can pay this in, here's what to do...

Open & switch to HSBC's Advance Account*, and you'll get £120. Then open its linked ISA – a market-leading deal at 1.5% interest – and pay in £300+ as a lump sum, or £25 a month, and you get a £10/mth bonus for a year, a £240 total bonus.

Need-to-knows
  • You must open the account by 31 August, then use HSBC's switching service within two months of opening the account, plus pay in a minimum of £1,750 for the first two months to qualify for the bonus.
  • If you want to keep the account after the bonus is paid, you'll need to continue paying the £1,750.
  • The bonus will be paid within 100 days of opening your account, provided you've met the switching & pay-in criteria.
  • You'll be eligible to get HSBC's 1.5% Loyalty ISA and its 6% regular savings account (more on these accounts in the key questions below).
  • HSBC shares its £85,000 UK savings safety guarantee with First Direct, so ensure you don't hold more than £85,000 across the two banks.

How HSBC rates on service (in credit)

43% great

44% okay

13% poor

Date: Feb. 2015 Voters: 453

Stats box
  • Minimum monthly pay-in: £1,750 (equates to an annual salary of £26,400)
  • In-credit interest: None
  • Arranged overdraft cost: 17.9% EAR
  • Unarranged overdraft cost: £10 buffer, then 17.9% EAR interest, plus £5/day charge each day you're overdrawn (max £80/month).
Key questions

What's this about the extra £120 with the Loyalty ISA? If you switch to the Advance current account you'll be eligible to get its Loyalty Advance ISA, which currently pays a top rate of 1.5% AER (dropping to 1.4% from 29 July - still a decent rate). On top of this rate you'll get an extra £10/month when you either deposit at least £25 a month or a £300 lump sum into the ISA. You'll only get the extra £10/mth for the first 12 months.

What if I can't pay in the £1,750/mth? You need to pay this in for two months from the date of switching to get the bonus. But if you can't continue to pay it in afterwards, the account will just change to a regular bank account. If you also have the Advance Loyalty ISA, this will downgrade to the regular Loyalty ISA, currently paying 1.4% AER (and no £10/mth bonus).

However, if you want to keep the account for the ISA bonus, then you can jemmy the pay-in. HSBC states the money must come from external sources, so there is a workaround, eg, if you've £1,000/mth coming in, after payday just withdraw £750 either as cash or to an account with another bank, then pay it back in and BINGO, you've qualified.

Are there any other perks to the Advance current account? The account itself doesn't have extra benefits, but you'll be eligible to open its 6% regular saver and get discounts on other products, including mortgages and loans.

M&S Bank Current Account

Free £100 to spend in M&S when you switch, plus access to 6% linked savings

M&S Bank*

If you're an M&S shopper, then the M&S Bank* Current Account could be the one for you. It gives you an M&S gift card for switching to it, worth £100, plus you get reward points every time you use it in M&S. It's also got a decent £100 0% overdraft, so it's ideal if you just dip in and out of your overdraft by a few pounds.

Need-to-knows
  • You must fully switch using M&S Bank's switching service to qualify for the gift card.
  • There's no minimum monthly pay in, and you don't have to set up any direct debits.
  • There's a linked 6% regular saver account that you can open when you have this account.
  • Branches are in M&S stores, so have longer opening hours than some other banks.
  • M&S Bank has the full £85,000 UK savings safety guarantee.
Stats box
  • Minimum monthly pay in: None
  • 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 can apply online for the account. If accepted, you'll either need to call M&S Bank or go into a branch within six months to complete your switch. Once you've completed the switch, you'll get the gift card within a 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.

Club Lloyds Bank Account

Free £100 plus £25 to charity

Co-op Bank*

If you're looking for a bank that's got decent customer service, will reward you for switching, and also has an ethical stance, then look no further than Co-op Bank's* Current Account Plus. Provided you can pay £800 into the account each month, Co-op will pay you £100 for switching, plus £25 to your choice of one of seven charities.

Need-to-knows
  • If you can keep up the £800/mth pay in, you also get a £200 fee-free overdraft, although you'll still pay interest.
  • You can apply for the account online, but you'll need to call or go into a branch within two weeks to complete your switch.
  • Co-op Bank shares its £85,000 UK savings safety guarantee with Britannia BS, so ensure you don't have more than £85,000 across the two banks.

How Co-op rates on service (in credit)

71% Great

22% okay

7% poor

Date: Feb 2015 Voters: 347

Stats box
  • Minimum monthly pay in: £800 (equates to an annual salary of £9,850)
  • In-credit interest: None
  • Arranged overdraft cost: 18.9% EAR
  • Unarranged overdraft cost: £20 buffer, then £10/month service charge. 18.9% EAR interest, plus £10/day charge each day your overdrawn balance increases. (Max charges of £60 per quarter)
Key questions

I've heard a lot scandals about Co-op Bank - is it 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.

When do I get the bonus? Pay in £800 within 31 days of your switch date and the £100 bonus will be added to your account within 45 days.

Once the switch is complete, Co-op Bank will send details of how to choose the charity that will get £25. The seven options are: Action Aid, Amnesty International, Carers' Trust , Help the Hospices, Oxfam, Water Aid and the Woodland Trust. If you don't pick a charity, Co-op splits the £25 between them all.

How does the overdraft work? This one's a bit complex, so we wanted to spell it out. The arranged overdraft is fairly simple, you'll pay 18.9% EAR interest on your overdrawn balance. But, if you go into an unagreed overdraft, it becomes a lot more complex.

Using the unarranged overdraft has a £20 buffer. After this, you'll incur a £10/month service charge. You'll also continue to pay interest of 18.9% EAR on your overdrawn balance. You'll also pay £10/day if your overdraft increases during that day (so if you try and make further transactions).

But, there's a few waivers and limits. All unagreed overdraft service charges will be waived if it's the first time you're in your unagreed overdraft that year, and you're in it for six consecutive working days or fewer. Plus, you won't pay more than £60 in unagreed overdraft service charges over a three month period.

What if I can't pay in the £800/mth? If you can't pay in £800/mth, you can switch to Co-op's Standard Current Account* and still benefit from the £100 plus £25 switching bonus, though this account doesn't have the fee-free overdraft facility.

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

FREE annual European travel insurance

Nationwide FlexAccount*

Fancy free travel insurance from your current account? That's what the Nationwide FlexAccount* gives you. Get the account, and pay in at least £750 per month, and free European travel insurance is yours (if you're under 75). Plus, it's fairly reasonable to upgrade to worldwide or family travel insurance policies too.

Need-to-knows
  • If you have this as a joint account, both of you are covered by the free travel insurance.
  • You may not be covered under the insurance if you have pre-existing conditions. Check the policy wording (page 6) 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. But check our Travel Insurance guide to see if you can get the policy cheaper.
  • Nationwide has the full £85,000 UK savings safety guarantee.

How Nationwide rates on service (in credit)

74% Great

23% okay

3% poor

Date: Feb 2015 Voters: 1,325

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, then 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 31 December in the year of 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.

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

£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. But - here's the crux - it won't be right for everyone, so use our packaged account analyser tool to find YOUR top pick.

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.
  • Nationwide has the full £85,000 UK savings safety guarantee.

How Nationwide rates on service (in credit)

74% Great

23% okay

3% poor

Date: Feb 2015 Voters: 1,325

Stats box
  • Minimum monthly pay in : None
  • In-credit interest: 3% AER variable up to £2,500
  • Arranged overdraft cost: 0% 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, 26 months 0% on balance transfers and 0% on purchases for 15 months. But, watch out for interest - if your purchases don't fall under the 0% periods, you'll be charged 15.9% rep APR.

Plus, if you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can refer up to ten friends a year.

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

Club Lloyds Bank Account

£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 should 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.
  • First Direct shares its £85,000 UK savings safety guarantee with HSBC, so ensure you don't hold more than £85,000 across the two banks.

How First Direct rates on service (overdrawn)

89% Great

5% okay

6% poor

Date: Feb 2015 Voters: 162

  • Minimum monthly pay in: £1,000 (equates to an annual salary of £13,200)
  • 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 (including the transfer of your salary of at least £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 6% 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 reduced) once you've had the account for a year.

Need-to-knows
  • You can switch to this account if you're overdrawn with another bank, but there's no guarantee Nationwide will match the overdraft limit you currently have.
  • 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.
  • Nationwide has the full £85,000 UK savings safety guarantee.

How Nationwide rates on service (overdrawn)

69% Great

25% okay

6% poor

Date: Feb 2015 Voters: 104

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 fees (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 even more interest, plus a charge of £25 for every paid 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.

Are there any other perks? If you refer friends to Nationwide, it'll pay you and your friend £50 each if they opens an account. But, tell your friend to check this guide first, to make sure it's the right account.

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.

Get free travel insurance, cheap foreign spending or £100 bonus

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.

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?