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Free £200 cash, £185 in vouchers & more to switch
If you're unhappy with your bank account, don't just groan, as switching is easy – and you can get up to £200 in cash or £185 in vouchers as banks lust for your custom. This guide explains it all and compares all the best buys for you.
Other top MSE banking guides...
Packaged accounts: save £100s on travel, mobile and breakdown insurance
App-based banking: learn about the new wave of digital banks
Student accounts: get 0% overdrafts or other perks if you're studying
Graduate accounts: for when you've left university
Safe savings: find out how your money is protected
How does bank switching work?
The process is quick and easy since the seven-working-day Current Account Switch Service (CASS) began in September 2013. Just open a new account, then use the new bank's switching service and it'll close your old account and move your money, direct debits, standing orders etc across.
It'll also move payments meant to go into your old account into the new one, eg, your salary. If something goes wrong, the bots behind the scenes sort it, so for at least 3yrs any money paid into the old account or wrongly earmarked to come out of that account is transferred to the new one and if you're hit with any charges due to an error in the switch, this should be refunded by the new bank.
More than 40 providers are signed up to CASS - to check yours, use the list of banks and building societies involved.
Rather watch than read?
This helpful little video gives you the bank switching lowdown...
Quick questions
Are recurring payments from my card also moved?
No. Otherwise known as continuous payment authorities, these are set up using your debit or credit card details, as opposed to your account number and sort code. They're often used for memberships, online subscriptions and payday loan repayments. The company will ask for the long number across your card, giving it permission to take cash from your account.
If you switch, you need to give your new card details to any companies that take money from your card in this way.
Some switching bonuses or perks require 'active' direct debits. What does this mean?
An active direct debit is one that has paid out in the last 13 months, or – if it has never paid out – is less than 13 months old.
Direct debits have this dormancy rule in place, so old direct debits can remain active even if you're not paying out on them every month in case they're needed again, or they're there for annual payments. But after 13 months, your bank may remove them from your account, or mark them as inactive.
Do I HAVE to close my old account when switching?
Yes, if you switch via the seven-working-day Current Account Switch Service (CASS). As part of the process, your new bank will automatically close it and also move all payments, eg, direct debits out or salary in, across.
But if you'd rather keep your old account open, or your old or new bank is one of the few not signed up to CASS, you'll need to use the older, slower and more complicated system. Your payments will still be switched over, but there's less protection if anything goes wrong, and it's likely you won't get any of the switch incentives.
Can I switch a sole account to a joint account and vice versa?
If you want to join finances with a partner, it's possible to use seven-day switching to switch a sole account to a joint account. Do remember that this'll link your finances, so their credit record could affect yours – always think carefully before doing so.
This doesn't work the other way round, so you can't switch a joint account to a sole account under seven-day switching.
I have other products such as an ISA and credit card with my bank – what will happen to them if I switch away?
Most other products that you hold are totally separate, so moving your current account won't affect the others and it's fine to do. In fact, even if you have a direct debit set up to pay them, that'll automatically be moved to your new bank account for you so it shouldn't put you off switching at all.
There are a few special regular savings accounts that are linked to current accounts (where you get a special rate if you've got the current account) that you could lose if you move bank, but you'll know if you've got one of those and it's likely the new bank will offer something similar.
Seven tips to find your best account
Not every bank account is right for you so use this these tips to nail YOUR best.
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How to get around banks' minimum pay-in requirements to get the perks
If you can't afford some bank's minimum monthly pay-ins, don't fret. Firstly, some, such as M&S Bank & Halifax give you a switching bonus without paying anything in – though you won't get their ongoing rewards.
If there is a minimum, you can play the system. Say you need a min £1,000 but only have £500 coming in. If you pay £500 in, withdraw it or move to another bank, then pay it back in... BINGO, that's your £1,000.
Note, we've had reports some 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
Top bank accounts (ranked by minimum pay-in)
Account Minimum pay-in/mth Equivalent salary/yr needed What if I don't pay in this much? Halifax Reward None for switch bonus, £750 for ongoing reward £9,075 £3/mth reward not paid M&S Bank None for switch bonus, £1,000 for ongoing reward. £12,675 £5/mth gift card not paid Santander £500 £6,000 No interest paid Tesco Bank £750 £9,075 No interest paid Barclays £800 £9,800 No rewards earned Bank of Scotland £1,000 £12,675 No interest paid First Direct £1,000 £12,675 £10/mth fee Nationwide FlexDirect £1,000 £12,675 No interest paid Club Lloyds £1,500 £21,500 £3/mth fee RBS £1,500 £21,500 No cashback HSBC £1,750 £25,900 Transferred to HSBC's Bank Account What counts as a month to meet the minimum pay-in amounts?
The answer to this isn't as straightforward as you might think, as what counts as a month depends on which bank you're with.
For example, if you bank with Santander, a month counts from the anniversary of the date that you opened the account. In contrast, bank with Lloyds, and it simply follows the calendar month. It's important to clarify this with your bank to make sure you don't get penalised for missing minimum monthly pay-ins, especially if your pay is erratic.
See our table below for the policies of the major UK banks:
Lender What counts as a month? Bank of Scotland Calendar month Barclays Calendar month Co-op Bank Calendar month First Direct Calendar month Halifax Calendar month Lloyds Calendar month M&S Bank Calendar month Nationwide Calendar month NatWest/RBS Calendar month Santander Statement month Tesco Bank Statement month TSB Calendar month Last updated July 2018.
Why do banks have a minimum pay-in?
It's essentially just a way to ensure you use their account as your main account.
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Which pays more? Free intro cash bonuses or savings interest?
We used to say if you have savings, an interest-paying account would win. But with several banks including Santander, Lloyds and TSB, cutting high rates in recent years, now for most, accounts paying cash or vouchers are best.
Even high interest accounts only pay that return on smaller sums, see our top savings account guide for where to earn the best savings return.
Quick questions to consider
Can I switch loads to bag lots of intro bonuses?
Yes, though as you can usually only get the incentive once from each bank, at some point you will run out. However, bear in mind that to earn more than a £100 switching bonus in bank savings you would need £2,000+ (at current rates). So, it depends on whether you have this to save.
One other thing to consider: continually switching accounts has a negative impact on your credit score. Lenders like to see stability in your accounts, and this doesn't demonstrate it.
Where could I save otherwise?
The top easy-access savings account pays 1.4% AER, so you can earn that without switching bank. So if bank savings pay, for example, 3%, then the gain from choosing it as your bank is 1.6%.
But to counter this, the easy-access savings accounts tend to have high limits on the amount you can save in them – often £100,000s or £1,000,000s – whereas the most you can save and still get interest in a bank account is £20,000.
Do you pay tax on savings interest?
Since 6 April 2016, most people won't pay tax on savings interest as the personal savings allowance has kicked in.
Basic-rate taxpayers can earn up to £1,000 in savings interest (incl that earned in current accounts) before paying tax on it, easily covering the maximum interest on the accounts in this guide. For higher-rate taxpayers it's £500, which will cover all accounts in this guide. Additional-rate taxpayers don't get an allowance.
Bonus payments are tax-free whatever rate of tax you pay. If you've used your personal savings allowance on other savings, or you don't get one, it's likely switching bribes will win for you.
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If you're often overdrawn, focus on the account with the cheapest overdraft, not other benefits
There are huge differences in the amounts banks charge for going overdrawn; we identify the cheapest in our top overdraft 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, then making (and sticking to) a budget.
Quick questions
Can I still switch if I'm overdrawn?
There aren't any rules on this – it varies between providers. Whether you get an overdraft, and whether your limit is high enough to switch your overdraft, will depend on the new account provider's lending procedure.
If your new bank or building society can't help, you need to make separate plans to pay back what you owe. Try the free budget planner to help.
Can you shift the debt to a 0% credit card?
Yes, if you qualify for the credit card and enough of a credit limit.
There are a few specialist money transfer credit cards that let you pay cash into your bank, so you can pay off your overdraft, then you owe it instead. The top-pick card gives you up to 28 months at 0% in which to clear your overdraft – though you will pay a 2.99% fee to transfer the cash to your bank account. There is a card which gives you up to 36 months 0%, but you'll pay a higher 3.94% fee to transfer the cash.
However, this technique can be tricky, and you need to know what you're doing, as most cards don't allow this cheaply. You can find step-by-step help in Money Transfers.Can you SPEND on a credit card instead of from your current account?
Yes, but only do it if you're disciplined. Use a cheap 0% spending card for your normal day-to-day spending, making only the minimum monthly repayments on it. This means your monthly income pays off your overdraft as no money's being taken out of that account. Instead, debt builds up on the credit card, but at 0%.
Doing this is technically the best solution for those with self-discipline – you can't allow yourself to spend more on this card or build up more debt. You should stop using the card once your account is in credit and try to pay off the card by the end of the 0% period. Or, at the worst, shift it to a cheap balance transfer deal.Can you change the dates your bills go out to help money management?
Yes. If you jump regularly between being in credit and using your overdraft, it's sensible to keep as much money in your account for as long as possible. Therefore, if you've the self-discipline, set all your household bills, direct debits and other standing orders to leave your account towards the end of your working month, artificially boosting your balance.
This will also help to limit overdraft charges as most are levied on a daily basis, so the longer you're not in the red, the less you pay.
If you fear this may lead to money for bills being spent before it's needed, don't take the risk. Also, take a read of the budgeting guide to help manage your cash flow.
Does your account give you a 0% overdraft buffer?
If you go into an arranged overdraft by a marginal amount – usually not more than £15 – some banks will make allowances and not charge you the usual hefty fees. See below for a list of the standard buffer amounts and charges outside this limit. Some banks also give an unarranged overdraft buffer – check with your bank if this applies to your account.
The big banks' arranged overdraft buffers
BankBuffer zoneText alerts (1)Bank of Scotland £10YesBarclays £15YesHalifax £6.99YesLloyds £6.99YesNationwide FlexDirect – £10
FlexPlus – £250YesNatWest/RBS £10YesSantander £12Yes(1) These will tell you when you need to pay money in to cover payments, or when you've gone into or over an overdraft.
Have you registered for free 'close-to-overdraft-limit' text alerts?
Most banks will now send you text alerts when you're in your overdraft or a payment's coming out that will put you there. Most also allow you until 3pm or 3.30pm to put extra cash into the account to allow you to avoid charges
To register for this service, you'll usually need to opt in through online banking, or by phone, though it does vary from bank to bank. Alternatively, if you prefer to bank in branch, staff there should be able to help.
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All the top bank accounts require you to pass a not-too-harsh credit check
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 point below...
Quick question
Could you be rejected when applying for a bank account?
Possibly. If rejected, it may be for one of many reasons, such as you've got a poor credit record, you've had past dealings with that bank where you've missed payments, or the bank doesn't think you'll be a profitable customer.
But don't assume because one bank doesn't want you, none of the others will. All the same, don't just apply everywhere as it can do more damage to your credit record.
If you're rejected, you need to do two things – first, ask the bank why it rejected you. Its answer may be vague, but it should tell you if you were rejected because of your credit record.
The second thing you need to do is to check your credit files with the three credit reference agencies to spot any problems or possible errors. Our credit report guide tells you how to do this for free and how to correct errors.
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Can't get a bank account? There is a way...
Sadly, 1m+ in the UK are rejected from mainstream bank accounts. Yet as long as you can prove your identity, you should be able to get a basic account – here, you're not credit-checked as strictly, so most can get one.
You can do most of the same things as with a normal bank account except you won't 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?
Regulations mean that you won't pay anything – these accounts are designed to be free of penalty charges. But it's always best to manage your money carefully so you've enough in your account to meet bills and other outgoings.
How do you open a basic bank account?
You'll usually need to go into a branch to open these, as you'll need to show ID to do so. Make sure you ask for the basic bank account application forms specifically or you'll get standard ones for standard bank accounts and then most likely be rejected.
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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 in trouble, charges can be hefty.
If overdrawn and flirting around your limit, don't just tackle the symptoms. Try using the free Budget Planner, give yourself a Money Makeover to cut bills, and take a look at our Cut Overdraft Costs guide. 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.
Quick question
How do unauthorised overdrafts work?
An unauthorised, or unarranged, overdraft is when you go beyond your allowed limit so you incur bank charges – you could be charged anything from interest to a daily or monthly charge – often up to £5/day.
You can also be charged fees for paid or unpaid items – these are where a payment has taken you into your unarranged overdraft and the bank has accepted or rejected the transaction. They can be hefty, amounting to £5-£10 per payment.
Banks have to have a maximum monthly charge for unarranged overdraft fees, which they must display on their sites. This should help keep costs down, though you can still face significant fees.
As of Feb 2018, all banks with more than 150,000 active current accounts also have to alert you by text or through your app when you're close to going into an unarranged overdraft.
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You could save £100s on travel, mobile & breakdown insurance with a packaged account
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 worthless if you don't need the cover or you could have got it cheaper elsewhere, so check first. See the Best Packaged Accounts guide for more.
Quick questions
What's the real annual cost of one of these accounts?
You need to work out how much it's costing you over the year. For example, if you're paying £13 per month, that's actually £156 a year.
And what are you getting for that? Are you getting a better mortgage rate than someone without the fee-paying account? Or better savings rates? Or lower overdraft charges?
Just because getting the packaged account gives you 'better rates', don't think that automatically means you've got a top deal. You need to compare it to the deal you could get if you didn't have the packaged account – and then figure out if the fee's worth it.
What's the value of the 'benefits' you're getting?
To evaluate how you benefit, you first need to check that you actually use the benefits the account offers.
And if you do use them, is the account fee cheaper than getting them separately? For example, for less than £40 a year you can get annual travel insurance or breakdown cover. So, if that's all your packaged account offers, you could be paying too much.
If you're not benefiting, why do you have the account?
If the account doesn't save you money, ditch and preferably switch to a no-fee bank account. This guide will help you find the right account for you.
If you didn't know you had a packaged account, or found out you weren't eligible to claim, you may have been mis-sold – see the step-by-step reclaim packaged account fees guide for full help.
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Top bank accounts with perks for switching
There are some excellent deals below but you typically need to meet key conditions to get the full perks, so read carefully.
Biggest upfront bonus: Free £150 (+ £50 more after 1yr)
HSBC Advance*
If you want to be paid to switch, this account is the strongest on the market. Open and switch to HSBC's Advance Account* and you'll get £150 plus a further £50 after a year. You'll need to pay in £1,750/mth so consider whether you'll be able to meet this before opting for it. You'll also be eligible to get HSBC's 5% regular savings account.
Can't get this account? You can also try HSBC's Bank Account, which offers £75 to switch and has a lower £500 monthly pay-in.
Need-to-knows
- To get the bonus, start a full switch using HSBC's official switching service, including at least two direct debits or standing orders, within 30 calendar days of opening the account.
- The bonus is paid into your account within 30 calendar days of the switch completing.
- You can't get the bonus if switching from another HSBC account, or if you've had a current account with it since 1 Jan 2015. You can get it if you have a mortgage or savings account with HSBC – just apply online as normal.
- If you want the extra £50 bonus, you need to register for mobile or online banking, plus you'll need to pay in £1,750/mth (or a total of £10,500 every six months). It'll be paid within 30 calendar days of your first anniversary of account opening.
- 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.
Top for service + choice of £199 headphones, £150 Expedia vch & more + 0% overdraft
First Direct*
If customer service is crucial, this is the account for you. It has won every bank service poll we've ever done, with 89% of its customers rating it 'great' in our latest.
First Direct* has now boosted its switching offer, giving new switchers a choice of higher end gadgets such as £199 Bose headphones or a £165 speaker (both via our link only), a £150 Expedia voucher, or an online self-development course which normally costs £150-£1,000 (see key questions for full list).
You'll also get a £250 0% overdraft, and can open a linked 5% regular saver.
Need-to-knows
- To get the freebie 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. You'll receive an email within 14 days of meeting the criteria containing a registration code and instructions for how to register. Once registered, you'll be emailed an order code within five days. Then, choose your freebie within 90 days of getting your code.
- If you have any problems with the switching process, you can contact First Direct's account opening team on 0800 24 24 24.
- You're not eligible for the bonus if you've ever had an account with First Direct.
- After six months you need to pay in £1,000 each month, have an average monthly balance of £1,000 or hold selected other accounts with First Direct to avoid a £10 monthly fee.
- 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
Good for M&S shoppers: Free £125 gift card which can be boosted by £5/mth for a year
M&S Bank*
If you're an M&S shopper, this account could be worth a go. The M&S Bank* Current Account gives new switchers a £125 M&S gift card, with no minimum pay-in, plus reward points when you shop in M&S. You also get a decent £100 0% overdraft, and access to a linked 5% regular saver.
As an extra perk, you can get another £5 added to the gift card each month for the first year when you deposit £1,000/mth and keep at least two direct debits active. This means that you could get up to £185 for switching to M&S and keeping the account for at least 12 months.
Need-to-knows
- To get the £125 gift card you must open the account and fully switch your account using M&S Bank's switching service within three months, including two or more active direct debits (M&S Bank classes an active direct debit as one that's paid out in the last 13 months).
- Once you've switched, you'll get the bonus within a month.
- There's no minimum monthly pay-in to get the £125, but if you want the extra £5/mth you must pay in £1,000 each month, and keep 2+ direct debits active.
- M&S Bank has the full £85,000 UK savings safety guarantee.
Good for quick cash: Free £75 paid before your switch completes, plus £2/mth (£3/mth until Oct)
Halifax Reward
Apply to switch to the Halifax Reward account and you'll get £75. It's the quickest bank to pay its bonus, promising it by the time your switch completes. You can also get ongoing rewards of £3 a month if you meet minimum pay-in and direct debit criteria, though this is dropping to £2/mth from October - the second cut to rewards on this account in under two years.
Open the account in August and you could get £101 including the switching boon if you keep the account for a year (£99 from October).
Need-to-knows
- You'll get the bonus paid into your account before the switch has completed.
- To get the £3/mth reward (£2/mth from Oct), 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 £3 that month. Do note though that if you switch, you get six 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 (the pair are part of the same group). Existing customers can get it by switching a non-Halifax account into their existing Reward account.
- 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.
Top bank accounts that pay savings interest
Sadly, these aren't as attractive as they used to be given the low interest rate environment, but here are the top deals as they stand.
Good for smaller savings: 5% interest on £2,500 fixed but only for a year, 1% afterwards
Nationwide FlexDirect*
Open a 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. You can also open a linked 5% regular saver with this account.
Need-to-knows
- 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 (incl two direct debits) you will both receive £100. You can be paid for referring up to 5 friends per tax year.
- You can't get the 5% interest rate if you've ever held a FlexDirect account before.
- This account also offers a 12mth 0% overdraft (as long as you haven't had a FlexDirect account before), 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 £85,000 UK savings safety guarantee.
How Nationwide rates on service
3% on £3,000 (+ trick to get it on £12k) + boosted Clubcard pts
Tesco Bank*
The Tesco Bank* Current Account guarantees at least 3% AER variable on up to £3,000 until 1 April 2019 – though you have to pay out three direct debits per statement month on each account to get the interest.
You can open two accounts per person so if you're a couple it means you can open four, earning a decent 3% on up to £12,000.
As an extra perk, you get Clubcard points on debit card spending. The number you can earn in Tesco are quadrupled until 1 April 2019, from the usual 1 per £4 to 1 per £1, good if you're a Tesco shopper. For example, if you spend £80/week in Tesco, you get 80 points per week (4,160/yr). That's worth £41.60 in normal Clubcard points, but you can boost that to £166, and this is on top of normal Clubcard points.
Need-to-knows
- To get the interest, you'll need to pay in £750 and pay out at least three direct debits each month – and direct debits to a Tesco Bank savings account don't count. Tesco Bank counts a month as a statement, not a calendar, month.
- You can open two of these accounts, so it's possible to earn 3% on up to £6,000 if you take advantage of that.
- If you have two Tesco Bank current accounts, it's possible to cycle the £750 minimum monthly pay-in between the two.
- On top of normal Clubcard points earned in Tesco, you get one point per £1 spent in Tesco until 1 April 2019 (then one per £4 spent in Tesco), and one point for every £8 spent elsewhere.
- The interest rate is guaranteed at a minimum of 3% AER until 1 April 2019.
- Tesco Bank has the full £85,000 UK savings safety guarantee.
Other top interest-paying current accounts
It's not just these accounts that offer decent interest rates. A few other accounts give you varying levels of decent interest (see below), and the one you pick should depend on how much cash you're likely to be able to keep in your account.
| For comparison, the top easy-access savings deal open to all pays 1.4%. | ||||
| In-credit interest (AER) | Max interest /yr (1) | Min monthly pay-in | How many can you have? | |
|---|---|---|---|---|
| TSB Classic Plus (2) | 5% on up to £1,500 | £74 | £500 | 2 (2nd must be joint) |
| Bank of Scotland Vantage | 1.5% on up to £5,000 | £74.50 | £1,000 (3) | 3 |
| Club Lloyds | 1.5% on up to £5,000 | £74.50 | £1,500 (4) | 2 (2nd must be joint) |
| (1) Before any tax if you always held the max balance+. (2) Warning. TSB is currently not accepting online applications for its current account due to IT problems. We'll update this guide when online applications re-open. (3) You need 2+ direct debits going out to get the interest, and must also add the 'Vantage' feature to your account. (4) If you don't pay in this much, there's a £3/mth fee. You also need 2+ direct debits going out to get the interest. | ||||
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Top bank accounts that give ongoing bills cashback
Some accounts give free cash as a percentage of what you pay out in bills, though many come with a fee, so check you spend enough on bills for it to make financial sense.
Best if you've smaller bills or a Santander mortgage: 1-3% cashback on bills
Santander 123 Lite*
The Santander 123 Lite* gives 1-3% cashback on different bills, including council tax, water and energy, as long as you pay by direct debit, for a £1 monthly fee. If you have a Santander mortgage, you could also get up to £10/mth cashback on it, which gives seriously good returns on this account.
If you have high bills and don't have a Santander mortgage, the NatWest account below could beat this one, as it pays a flat 2% cashback on the same bills, though comes with a higher £2/mth fee. Even then it's close, with our high-bills scenario showing Natwest giving £135/yr cashback compared with Santander's £132.
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 & life protection, 1% on water, council tax and Santander mortgage payments (max £10/mth on mortgage), as long as you pay 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.
- You also get access to a linked 5% regular saver.
- The main Santander 123 account comes with the same cashback but has a higher £5 monthly fee. It also pays 1.5% AER variable interest on up to £20,000, though the higher fee means its likely beaten by getting the 123 Lite and the top easy-access savings account.
- Santander shares its £85,000 UK savings safety guarantee with Cahoot, so don't hold more than £85,000 across the two banks.
Best for higher bills: 2% cashback on bills
NatWest Reward* (same deal avail with RBS*)
If you don't have a Santander mortgage and have high monthly bills, NatWest's Reward Account* (also offered by sister bank RBS*) could beat the Santander account above. For a slightly higher £2 monthly fee, it will pay you a straight 2% cashback on the same bills, including council tax, water and energy (but excluding mortgage payments), as long as you pay by direct debit.
Need-to-knows
- You can get 2% cashback on council tax, gas, electricity, water, home phone, mobile, TV and broadband, as long as you pay by direct debit.
- There's a minimum pay-in of £1,500 per month to earn rewards, and you also need to register for online or mobile banking.
- 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 Caffè Nero or a donation to one of 10 charities including Barnardo's, Cancer Research UK, Macmillan Cancer Support and NSPCC.
- As an added perk, you won't be charged any fees for overseas spending until 31 Aug 2018, though a 2.75% fee (min £1) will apply after this date and you'll still pay hefty fees for overseas cash withdrawals.
- RBS and NatWest both have the full £85,000 UK savings safety guarantee.
Other accounts that offer rewards
While they don't make it into our top picks above, there are a few other accounts that offer monthly cash payments in return for your custom. We wouldn't suggest you specifically switch to them over the other accounts in this guide, but if you want some extra rewards you could consider them:
- Sign up to Co-op Bank's Everyday Rewards scheme and you can earn up to £5.50/mth. You'll get £4 each month you pay in £800, pay out four direct debits, receive paperless statements, log in to online or mobile banking, and stay within your overdraft limit. If you meet all the criteria above, you'll also get 5p per debit card transaction, up to a maximum of £1.50 per month, though getting this isn't worth spending more than you usually would.
- Barclays Blue Rewards is an add-on to Barclays current accounts which, for a £3 monthly fee, will pay you at least £7/mth back – as long as you pay in £800+ and pay out at least two direct debits each month. You can get even more if you hold selected products with Barclays. For full details of the scheme, see our Barclays Blue Rewards news story.
Top bank accounts for insurance
There are some good deals below but check you'll use the perks or whether it's cheaper to buy the insurance elsewhere before applying.
Up to £700 of travel, mobile & breakdown cover for £156
Nationwide FlexPlus* Monthly fee £13 (£156/yr)
Nationwide's* FlexPlus account is a cracking deal – IF you'll use the features. You get worldwide family travel insurance up to age 74 (which can cost more than the account charges alone), family smartphone insurance and UK and Europe breakdown cover.
You also get 3% AER variable interest on up to £2,500, meaning you could earn £74 in interest each year.
Need-to-knows
- The travel insurance covers worldwide trips (including golf, business and winter sports) for you, your partner and dependent children at the same address up to your 75th birthday. It also covers those under 19 (under 22 if in full-time education) who travel independently.
- The mobile cover includes loss, theft, damage or breakdown, for all phones owned by you, your partner and dependent children living at your address (max value £1,000, children must be under 19 or 22 if in full time education).
- You get breakdown cover with the account, across the UK and Europe. It covers the account holder(s) driving any private car.
- We've calculated that all the insurances this account offers could be worth £700 or more. Here's how we worked this out
- Mobile cover for all the family's smartphones. Our cheapest iPhone insurance costs £80/yr up to the iPhone 8 or £120/yr for the iPhone X or latest XS. If there are four of you, that's £320-£480's worth.
- World family travel insurance (inc golf cover). Cheapest comparable cover we've found elsewhere is £60-£161/yr for the travel insurance for an under-65, £121-£242 if 65-74, plus £24/yr for golf cover.
- European breakdown cover. Covers account holder(s) in any car. Similar cover we've found elsewhere is £60-£73/yr.A family of four needing it all could pay up to £700 buying all the comparable insurances separately. Do bear in mind that the price of individual cover will also vary with the number of people in your family being covered.
- The account pays 3% AER in-credit interest on balances up to £2,500, beating top savings accounts. This works out at a max interest of £74/year, which – if you've the savings to put in there – goes some way to offsetting the monthly fee.
- If you've a pre-existing condition, tell Nationwide as you may need to go through the insurer's medical screening process to see if it can cover you.
- If you refer a friend and they successfully switch to a Nationwide current account (incl two direct debits) you will both receive £100. You can be paid for referring up to five friends per tax year.
Top accounts if you're overdrawn
Overdrafts are debts, and often they're more expensive than credit cards, so aim for an account with the lowest fees.
But if 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 our Cut Overdraft Costs guide.
£250 0% overdraft, plus top service
First Direct*
If you just dip in and out of your overdraft, the First Direct* account should cover you for free, as it offers a £250 0% overdraft. It's also the best account for service, with 89% saying they had 'great' service from First Direct in our last poll.
Plus, if you switch to it you can choose from a series of perks like a £150 Expedia voucher, gadgets such as Bose headphones or a Fitbit, or an online self-development course.
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 give you a switch incentive if you're a new customer switching to its account using its dedicated switching service, as long as you pay in £1,000 within three months of opening the account.
- You'll receive an email within 14 days of switching containing a registration code and instructions for how to register and choose your gift. You then need to choose your gift within 90 days of registering.
- You can't get the switching bonus if you've ever held an account with First Direct before.
- You also get access to a linked 5% regular saver.
- 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
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 open a 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 lowish at just 50p/day) 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 (incl two direct debits) you will both receive £100. You can be paid for referring up to 5 friends per tax year.
- You won't get the fee-free overdraft if you've had a FlexDirect account before.
- You also get access to a linked 5% regular saver.
- Nationwide has the full £85,000 UK savings safety guarantee.
How Nationwide rates on service
Easy-to-control overdraft with a lowish rate, plus no extra charges if you bust your limit
Starling Bank*
Though it doesn't offer a 0% overdraft, new app-based Starling Bank* has one of the lowest standard overdraft costs of 15% EAR interest, and unusually it won't charge you extra if you go over your agreed overdraft limit.
It's also easy to control your overdraft limit in the app, and Starling will send you real-time notifications when you use your debit card and when you're about to go into, or are using, your overdraft.
Need-to-knows
- Overdraft interest is waived if it's less than 10p in any month.
- If you go past your overdraft limit, you won't face any extra charges but won't be able to use your account until you bring your balance back inside your limit.
- Unlike many other banks, Starling doesn't require you to pay in a minimum monthly amount or have direct debits set up.
- If you're in credit you'll earn 0.5% AER interest on up to £2,000 and 0.25% AER interest between £2,000 and £85,000.
- Starling Bank has the full £85,000 UK savings safety guarantee.
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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.
See the chart below for what Ethical Consumer's ratings mean.
Get 5% interest for a year or ongoing rewards
Top Rated Ethical Bank Accounts
Ethical Rating 13.5/20
Nationwide – 5% interest for a year
Nationwide's FlexDirect gives 5% interest fixed for a year, and has a decent customer service rating. Min salary: £12,675. See full details.
Customer service: 73% great, 21% OK, 6% poor.
Ethical Rating 12/20
Co-operative Bank – Ethical banking and £5.50 monthly rewards
Co-op's Current Account offers £5.50/month with its Everyday Rewards scheme if you jump through some hoops. It's one of Ethical Consumer's
top picks for its unique campaigning brand.
Customer service: 63% great, 29% OK, 8% poor.
Quick questions
How did the change of ownership affect Co-op Bank's score?
Back in 2013, Co-op Bank was largely taken over by hedge funds, though it's retained its ethical stance with Ethical Consumer scoring it a decent 12.
The bank put itself up for sale in Feb 2017, though this has now been cancelled as it's reached a deal with its existing investors. Co-op Bank says that this will protect its ethics.
How safe are savings in the Co-op Bank?
There are still fears about the stability of the Co-op Bank. Yet the key fact is the first £85,000 of savings per person in the combined group (Co-op Bank, Smile, Britannia) is guaranteed by the Financial Services Compensation Scheme. This includes money in your current account. For how this works, see full Savings Safety info.
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 and 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
This 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
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How does it work with reward payments and tax?
As well as offering in-credit interest or bonuses for switching, a few current accounts now pay rewards for holding the account and meeting certain criteria, such as paying in a set amount each month or having direct debits.
Some of these, such as the Halifax Reward Account and Co-op Bank's Everyday Rewards scheme, are paid with basic-rate tax already deducted. Others, including Barclays Blue Rewards, are paid without any tax removed.
With the introduction in April 2016 of the personal savings allowance (PSA), meaning interest is now paid tax-free, some people hoped that they'd see an increase in the reward amounts paid to them.
However, these payments don't count as savings income for tax purposes and instead are classed as 'annual' or 'miscellaneous' payments. This means that the rewards don't count towards your PSA, and they're still liable to be taxed.
If you're a non-taxpayer, you should claim back any tax taken using the R40 form. Higher and additional-rate taxpayers may need to pay more via tax returns.
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Is there a way to track down old bank accounts?
In the UK, old, now-dormant accounts hold billions of pounds that lay unclaimed – and if you've switched several times, you may still have old accounts that were never closed.
It's straightforward to get it back, we've full details in the Reclaim Forgotten Cash guide.
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What if I can't pay a set amount into my bank account every month?
This isn't usually a problem. Mostly it just means that you won't get whatever benefits that account offers for that month, though watch out for the First Direct and Lloyds accounts, as they'll charge you a fee if you don't meet the minimum pay-ins.
Other accounts will just not pay you interest, for example, the Halifax Reward and Santander accounts don't need regular monthly deposits, but unless you sometimes pay at least £750 and £500 in respectively, you'll never earn any interest.
Unusually, M&S Bank offers a decent current account with no minimum pay-in required for most of its benefits.
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I applied for one of these accounts and got rejected. What can I do?
You could try a basic bank account. 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.
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How do I find my local branch?
If you go onto your bank's website it will all have a 'branch finder' facility. Usually you'll have to type in your location or postcode and your nearest branch will come up. If you're searching on a mobile phone, often it will link to your GPS location and will automatically show you where your closest branch is.
If you just want to find your closest bank, and don't mind which bank it is, then visit yell.com and input that you're searching for a bank, and your postcode. It will then list the nearest branches, and tell you how far away they are.
Bear in mind, though, that this may miss banks' agencies – they're often found in local solicitors' or estate agents' offices. For these, you may have to ask locally.
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How long do transfers take?
Most banks these days use Faster Payments for bank transfers, meaning most transfers you make should arrive within two hours, or at least the same day.
Faster Payments is available 24 hours a day 365 days a year, so even if you transfer some money to someone you owe on Christmas Day, it will arrive in their account the same day.
If for any reason your bank or building society can't use Faster Payments (many credit unions can't, for example), then they will do a BACS transfer which takes three to five working days.
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How long does a cheque take to clear?
It depends on which bank you're with, as a new system has started rolling out to speed up the process to the end of the next working day.
The old system used the basic principle of 2-4-6. After two working days any interest will start to be earned on the money from the cheque. After four working days the funds will be available for you to use. And after six working days the money cannot be taken from you (unless you have acted fraudulently).
Cheques could take a day longer than the 2-4-6 system if you pay in a cheque late in the business day, as it may not be processed until the next working day.
Under the new system, which began in October 2017, image-based clearing means you'll be able to withdraw money from a cheque by the end of the next working day at the latest. By summer 2018, all banks and building societies should use the faster process.
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How long does it take for money I pay in to count towards my balance?
If you pay the money in over the counter in your branch then the money will count towards your balance immediately. However, if you pay the money in via one of the bank's ATMs, it will vary and can take up to two more days to count towards your balance.
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What's the difference between a direct debit, standing order and recurring payment?
A direct debit is where you give permission to a company to take money from your bank account, and the amount can vary depending on what you're paying for. You have very little control over how much money is taken, though the company you're paying will tend to send you a statement informing you of how much will be taken and when.
A standing order is an instruction from you, to your bank, to pay a fixed amount of money to an account. You can send a standing order to any account, bill, mortgage payment or organisation. You have full control over how much and how frequent the payments should be.
A recurring payment is where you give a company your card details, and they use them to set up a regular or continuous payment from your card. You'll know if it's a recurring payment if you give the company your 16 digit card number, rather than your bank account number and sort code.
They're usually used if you're paying for a subscription, like a DVD rental service, or online porn site. With these payments you have very little control over how much or when they'll take out your money, and you usually won't be informed that the company will be taking a payment.
However, you can ask your bank to cancel them, as well as asking the retailer, if you want to end the service. See Recurring Payments.
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How do I set up a direct debit or standing order?
Direct debits are set up by the company you're paying. In most instances, the company will ask for your account details, and they'll set up a direct debit for you. However, sometimes they'll send you a direct debit form that you need to fill out, and hand in to your bank or send back. You can't set up a direct debit yourself.
A standing order is a payment you can set up yourself. You'll do this via your bank, in branch, on the phone, or online. To set one up you'll need the account details you're sending money to and you'll need to put in a set amount you want to send each time (you can change the amount with a day or two's notice).
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What day will my switch happen on?
If you don't specify a date everything will be switched over seven working days after the switch begins. If you opt for a specific date, the process begins seven working days before.
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Will my new debit card and PIN arrive within the seven days?
Bizarrely, given the song and dance about seven-day switching, your debit card and PIN aren't covered by it. So despite your account being open and set up – and your old account closed – in seven working days, you may have to wait a few days to access your money.
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How do I transfer money using a mobile phone number?
If you have a smartphone, you can use a service called Paym, which allows you to transfer up to £250 a day by using a mobile phone number.
You need to link to your mobile phone number to your account, through your mobile phone app or your online banking. Once linked, you can make a payment by selecting the person the person you want to pay from your mobile phone contacts, or manually enter a mobile phone number – but you can only send cash this way to people who have also registered their mobile number to receive mobile payments.
You'll then be asked to confirm the name of the recipient. Once you're happy, check the amount and press 'send'. You'll also receive confirmation that your payment has been sent. And don't worry, you won't be able to pay anyone who isn't registered.
See the Mobile-To-Mobile Transfer MSE News story for more.
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Is internet and mobile banking safe?
Yes. Banks have security systems in place that ensure fraudsters can't hack into your account whether you're logged in online or on your phone. But you still need to be careful – never ever send your online/mobile banking information to anyone.
If you're using a mobile app make sure you download your bank's official mobile app from your App store, and make sure you update the app regularly with any new security features.
It's also worth keeping your computer up to date with Free Antivirus Software, so you're protected from viruses and spyware.
Savings Safety
Provided the money is in a UK regulated bank or building society account, it's protected under the Financial Services Compensation Scheme (FSCS) meaning...
up to £85,000 per person, per financial institution is guaranteed
For large savings, to keep it 100% safe, simply spread it in a number of accounts, not putting more than £85,000 in any one account. In fact, consider spreading money even if you've under this amount, as if you needed to claim compensation you wouldn't have instant access to your cash.
The exact rules about what counts as 'UK regulated', the links between institutions, and joint accounts make it more complex. For full info see the detailed Are Your Savings Safe? guide.