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top bank accounts

Best Bank Accounts

Get £125 to switch, up to 3% back on bills or up to 2% interest

Martin Lewis
Martin Lewis
Updated 22 June 2021

The bank switch war has reignited - now three banks 'pay' you to switch. Top service bank First Direct, and its sister bank HSBC, both offer switchers £125, while Virgin Money offers an experience day voucher. Yet you don't need to switch to get a good deal - other accounts give cashback on bills or savings interest. This guide explains it all and helps you compare the top-pick accounts.

Top-pick bank accounts

Other top MSE banking guides...
Packaged Accounts: Save £100s on insurance
Need a business bank account?: For the self-employed
Basic Bank Accounts: For those with poor credit histories
Digital Banking: Learn about app-based banks

illustration

The five bank account need-to-knows

There are a few points you need to think about when choosing a new bank account to ensure you make the right selection:

  • 1. Switching is easy and takes just seven working days

    Current Account Switch Service logo

    If you want to switch bank, there's nothing stopping you, even with the coronavirus crisis going on.

    The Current Account Switch Service (CASS) process is straightforward and takes just seven working days. Just open a new account with your chosen bank, then request a switch through it – you'll usually be asked during the application if you want to switch. Provided both banks are signed up to CASS (most are), the switching service will 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 three years any money paid into the old account or wrongly earmarked to come out of that account is transferred to the new one. Also, if you're hit with any charges due to an error in the switch, this should be refunded by the new bank.

    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 banks require you to switch '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 CASS (which you usually need to do in order to get any switching incentives). 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 your new bank may offer something similar.

    • Which banks and building societies are signed up to CASS?
      More than 40 providers are signed up to the Current Account Switch Service (CASS):
       
      • Acorn Account
      • Adam & Company
      • AIB (NI)
      • Allied Irish Bank (GB)
      • Arbuthnot Latham & Co.
      • Bank of Ireland UK
      • Bank of Scotland
      • Barclays
      • Barclays Private
      • C. Hoare & Co.
      • CardOneMoney
      • Clydesdale Bank
      • Co-operative Bank
      • Coutts
      • Coventry Building Society
      • Cumberland Building Society
      • Danske Bank
      • First Direct
      • Habib Bank Zurich
      • Halifax
      • Hampden & Co
      • Handelsbanken
      • HSBC
      • HSBC Private Bank
      • Investec Bank
      • Isle of Man Bank
      • Lloyds Bank
      • Lloyds International
      • Lloyds Private Bank
      • M&S Bank
      • Metro Bank
      • Monzo
      • Nationwide Building Society
      • NatWest
      • Natwest International
      • Reliance Bank
      • Royal Bank of Scotland
      • Santander
      • smile
      • Starling Bank
      • Tesco Bank
      • thinkmoney
      • Triodos Bank
      • TSB Bank
      • Ulster Bank
      • Unity Trust Bank
      • Virgin Money
      • Weatherbys Bank
      • Yorkshire Bank

      Last updated March 2021.

  • 2. Many accounts have minimum pay-in requirements – but you can get around them

    With most of the top accounts in this guide, you'll need to pay-in a certain amount each month in order to qualify, get the perks and/or avoid a fee. But if you can't afford the minimum, don't fret – there's a way to 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 it to another bank, then pay it back in... BINGO, that's your £1,000.

    Note: we've had reports some banks may not accept you when you apply if your income's not high enough to meet the minimum monthly pay-in. 

    These are the minimum pay-ins for bank accounts we mention in this guide, plus details of what happens if you miss that minimum payment:

    Top bank accounts ranked by minimum pay-in

    Account Min monthly pay-in Equivalent salary/yr needed (1) What if I don't pay in this much?
    Virgin Money current account None N/A N/A
    First Direct 1st Account None (2) N/A N/A
    Nationwide FlexPlus None N/A N/A
    Santander 123 Lite £500 £6,000 No cashback paid
    Barclays Blue Rewards £800 £9,700 No rewards earned
    Co-op Bank Everyday Rewards £800 £9,700 No rewards earned
    Bank of Scotland Vantage £1,000 £12,400 No interest paid
    Nationwide FlexDirect £1,000 £12,400 No interest paid
    NatWest Reward £1,250 £16,700 Transferred to NatWest Select account
    RBS Reward £1,250 £16,700 Transferred to RBS Select account
    Club Lloyds £1,500 £21,200 £3/mth fee
    Halifax Reward £1,500 £21,200 £3/mth fee and no reward that month
    HSBC Advance £1,750 £25,600 Transferred to HSBC's Bank Account

    (1) This is an estimate and will be higher if you have anything taken out of your pay like pension or student loan contributions. (2) No monthly min but must pay in £1,000+ once to get switching bonus.

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

    Almost all major banks now charge about 40% interest for overdrafts: double what it costs to borrow on a high street credit card. But a few banks charge less, and some even offer 0% overdrafts – so if you're in the red, have a look at the top overdrafts section below for the cheapest options.

    It's worth noting that you CAN still switch if you're overdrawn – but it's tricky as it depends on the new provider's lending procedure. For example, it could decide not to offer you an overdraft, or could offer you a lower limit. Yet don't let that put you off trying – many banks have eligibility checkers so you can see if you're likely to get the overdraft before applying.

    For more help if you're struggling with your overdraft, see our full Cut overdraft charges guide.

  • 4. All the top bank accounts require you to pass a not-too-harsh credit check

    credit score illustration

    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're rejected, it could be for one of many reasons, for example: 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.

    Instead, 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.

    Then, 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.

    Can't get a standard bank account? Try a basic one

    Sadly, as many as one million people in the UK are rejected from mainstream bank accounts, often due to past credit problems. Yet as long as you can prove your identity and address, 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.

  • 5. 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 insurance policies – 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.

    For more help on whether this type of account is right for you, see our Best Packaged Accounts guide.

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Top bank accounts with freebies for switching

Three banks now offer cash or vouchers to switch. Read carefully, as you need to meet certain conditions to get the bonuses.

First Direct*

Joint-top upfront cash offer plus GREAT service: get a free £125 and access to a 1% regular saver

Apply*

Top-service bank First Direct* has upped the cash it pays to switchers - it's now offering newbies a free £125, up from its previous £100 offer. To get it, you need to open an account by 12 July, then both switch and pay in £1,000+ within three months of the date your account was opened.

You also get access to a linked 1% regular saver where you can save up to £250 each month, and many get a £250 0% overdraft. Plus, First Direct's cracking for service, with 91% ranking it 'great' in our last poll.

How First Direct rates on
service

91% GREAT
6% OK
3% POOR
DATE: FEB 2021. VOTERS: 650

To get £125 bonus: Apply by 12 July, then switch and pay in £1,000+ within three months of opening

Minimum monthly pay-in: None
In-credit interest: None
Who's eligible for offer: Anyone who's not had any account with First Direct before (or opened an HSBC current account since 1 Jan 2018 – they're part of the same group) and meets switching criteria
When bonus is paid: Within 28 days of meeting criteria
Does it have full FSCS savings protection? Yes, but it's shared with HSBC

Arranged overdraft cost: 0% under £250, 39.9% EAR variable above that
Unarranged overdraft cost: 39.9% EAR variable (max £20/mth)

APPLY*

HSBC Advance*

Joint-top upfront cash switch offer – get a free £125, plus access to a 1% regular saver

Apply*

Newbies switching to HSBC's Advance* account can get a free £125. To get it, you must open an account, then start a switch within 30 days (including moving two or more direct debits/standing orders across) and pay in £1,750+/mth. The £125 will then be paid within 20 days of the switch completing.

Once your account's open, you can also get a linked 1% regular savings account where you can save up to £250 each month.

How HSBC rates on service

42% GREAT
33% OK
25% POOR
DATE: FEB 2021. VOTERS: 318

To get bonus: Apply then start a switch within 30 days, including at least two direct debits or standing orders
Minimum monthly pay-in: £1,750 to keep the account open (or £10,500 every six months – equates to a £25,600 annual salary)
In-credit interest: None
Who's eligible for offer: Anyone who's not had an HSBC current account, or opened a First Direct account, since 1 Jan 2018 and who meets switching criteria
When £125 bonus is paid: Within 20 days of switch completing
Does it have full FSCS savings protection? Yes, but it's shared with First Direct

  • What if I can't pay in £1,750/mth?

    Under the account's terms, you need to pay in £1,750/mth, or pay in £10,500 over a six-month period (good if your earnings are irregular, for example). If you can't meet the minimum pay-in, the account will just change to HSBC's regular bank account.

     

    We've had reports that HSBC asks for income levels when you apply, so jemmying the pay-in may not be possible for this account.

Arranged overdraft cost: £25 buffer at 0%, then 39.9% EAR variable
Unarranged overdraft cost: 39.9% EAR variable. Maximum total charges £20/mth

APPLY*

Virgin Money

Get a Virgin Experience Day voucher ('worth £150') when you switch, plus 2.02% interest on up to £1,000

Apply

The Virgin Money current account gives newbies who switch to it a £150 voucher to put towards a Virgin Experience Day (eg afternoon tea or a track day). However, there are a few hoops to jump through to get the perks – see key info below.

The account's good for savers as it pays 2.02% AER variable on the first £1,000 in your account (there's no minimum pay-in required to get this). It also comes with a linked easy-access savings account paying 0.35% AER variable.

You also get fee-free spending and cash withdrawals overseas – an added boon if you normally travel a lot.

To get bonus: Apply for account online, then within 45 days – complete a switch (including at least two direct debits), download and register for the mobile banking app, and add £1,000 to the linked savings account (and keep it there until you get your Virgin Experience Day code)
Minimum monthly pay-in: None

In-credit interest: 2.02% AER variable on up to £1,000
Who's eligible for offer: You can't have had an offer from Virgin Money before, or had an account with Virgin, Clydesdale or Yorkshire since Mar 21.
When bonus is paid: You'll get an email with your Virgin Experience Day code and details of how to redeem the offer within 14 days of fulfilling the criteria above
Does it have full FSCS savings protection? Yes, but it's shared with Clydesdale Bank and Yorkshire Bank

  • How do I get the Experience Day voucher?

    First, open a Virgin Money current account by applying online, then, within 45 days:
     

    • Complete a full current account switch including two or more direct debits.
    • Deposit at least £1,000 into the linked easy-access savings account.
    • Download and register for the Virgin Money mobile banking app.

    You'll then get a gift card number and PIN by email within 14 days of meeting this criteria. You can use the code on the Virgin Experience Day website and redeem it for an Experience Day (or put it towards the cost of a more expensive experience). You have until 1 July 2022 to choose your experience - and then usually a further nine months or so to book it with the provider.

     

    If you haven't used the entire £150 balance on an experience, you'll have some money left over on the gift voucher that you'll be able to put towards another experience. 

     

    Important. You'll need to keep at least £1,000 in the linked savings account until you get your code.

  • What can I spend the voucher on?

    You can spend your voucher on a wide range of experiences including:

     

    • Driving track days
    • Afternoon tea
    • Arts and crafts (incl pottery, blacksmithing, jewellery making)
    • Spa days
    • Sports (incl stadium tours, clay pigeon shooting and golf lessons)
    • Flying (incl hot air balloon tours, and flying lessons)

    See the full range of experiences at Virgin Experience Days.

     

    When spending the voucher, be sure to compare prices to how much you'd pay going direct to the provider. Just because you're getting £150 off doesn't mean you're getting a good deal. 

  • How much interest can I earn?

    If you kept at least £1,000 in this account, over a year you'd earn £20 in interest before any tax – assuming the variable interest rate doesn't change.

Arranged overdraft cost: 19.9%, 29.9% or 39.9% EAR variable, depending on your "financial circumstances"
Unarranged overdraft cost: 19.9%, 29.9% or 39.9% EAR variable. £4 unpaid transaction fee. Unarranged overdraft charges are capped at £40/mth

APPLY

Top bank accounts that give ongoing cashback

Some accounts give free cash as a percentage of what you pay out in bills, or offer cashback for paying direct debits or logging in to online banking. However, many come with with a fee, so check the cashback you get is more than the fee before going for one of these accounts.

Santander 123 Lite*

Get ongoing 1-3% cashback on household bills for £2/mth fee

Apply*

The Santander 123 Lite* gives tiered cashback on certain household bills for a £2 monthly fee. Provided you pay by direct direct, you get:

  • 3% back on water bills
  • 2% back on gas, electricity, Santander home insurance and life protection
  • 1% back on Santander mortgages, phone, broadband, mobile and TV bills and council tax

Cashback is capped to £5/mth in each tier (so a max £15/mth). Those with mid-to-large bills can make around £40-£80/yr after the fee – you can use the calculator on Santander's site to check how much you could earn.

To get cashback, you need to pay in £500+/mth, have two active direct debits, pay your monthly fee and 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.

How Santander rates on service

55% GREAT
31% OK
14% POOR
DATE: FEB 2021. VOTERS: 537

Minimum monthly pay-in: £500 (equates to a £6,000 annual salary)
In-credit interest: None
Does it have full FSCS savings protection? Yes, but it's shared with Cahoot

  • What should I watch out for with the cashback?

    You only get cashback on direct debit payments made directly to 'qualifying suppliers'. While this includes all the biggest firms we sampled, it's worth checking your council and utility providers are covered before getting the account.

     

    You won't get cashback on any bills paid by recurring card payment (eg, Netflix, Amazon Prime Video, some Sim-only plans from providers such as Voxi), or on your TV licence payments.

    If your water bill is included within your council tax bill, you'll only get 1% cashback on the lot (Santander says this is because it's not possible to identify what portion of the payment relates to water).

  • Is the main Santander 123 account worth it?

    The main Santander 123 account comes with the same cashback on bills, plus 0.3% AER variable interest on up to £20,000 – for a higher £4/mth fee.

    But given that normal easy-access savings pay 0.4% with no fees, and you can get the same cashback from the cheaper 123 Lite account, the main 123 account won't be worth it for most.

Arranged overdraft cost: 0% for four months (only if you switch to this account). Then 39.94% EAR variable
Unarranged overdraft cost: 0% EAR variable

APPLY*

Other accounts that offer cashback

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:

  • The Halifax Reward account gives a choice of perks, one of which is £5/mth cash paid into your account. To get this, you'll need to pay in £1,500+/mth (there's a £3/mth fee if you don't), stay in credit and either spend at least £500/mth on your debit card OR keep at least £5,000 in your account each day of the month (you won't get any interest on this). You need to pick which of these criteria you'll meet – either debit card spend or minimum account balance – ahead of time, and can't change this until the following year.
  • Open a Barclays Bank Account and you can add its Blue Rewards scheme which, for a £4 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 have a mortgage, loan, home or life insurance with Barclays.

  • The NatWest Reward and RBS Reward accounts pay up to £5/mth cashback, for a £2 monthly fee. You get £1/mth back for logging in on mobile and £4/mth back paying out two or more direct debits of £2+ each. You need to pay in £1,250 a month or more to keep the account.

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Top bank accounts that pay savings interest

Sadly, these aren't as attractive as they used to be given the low interest rate environment, with accounts cutting rates almost across the board. We've picked a few accounts out here that pay decent rates on £2,000 or less. None require you to switch to get the interest (though most require a minimum pay-in each month, or to have direct debits going out).

If you have £2,000 to £5,000 to save, there are options are in the table below that'll get you more interest per year than Virgin Money pays, though overall they pay a lower rate.

Virgin Money

Get 2.02% interest on up to £1,000 with no minimum pay-in + experience day vch for switching

Apply

The Virgin Money current account pays 2.02% AER variable on the first £1,000 in your account (there's no minimum pay-in required to get this) and comes with a linked easy-access savings account paying 0.35% AER variable.

It also gives fee-free spending and cash withdrawals overseas – an added boon if you normally travel a lot.

Plus, newbies switching to Virgin Money can claim a £150 experience day voucher. See  FAQs for full details on the switch offer.

Minimum monthly pay-in: None
In-credit interest: 2.02% AER variable on up to £1,000
How to open/access: Open online or over the phone (16/17-year-olds can open in some branches) – note that only online applications are eligible for the switch offer
Interest paid: Monthly
Does it have full FSCS savings protection? Yes, but it's shared with Clydesdale Bank and Yorkshire Bank

  • How do I get the Experience Day voucher?

    First, open a Virgin Money current account by applying online, then, within 45 days:
     

    • Complete a full current account switch including two or more direct debits.
    • Deposit at least £1,000 into the linked easy-access savings account.
    • Download and register for the Virgin Money mobile banking app.

    You'll then get a gift card number and PIN by email within 14 days of meeting this criteria. You can use the code on the Virgin Experience Day website and redeem it for an Experience Day (or put it towards the cost of a more expensive experience). You have until 1 July 2022 to choose your experience - and then usually a further nine months or so to book it with the provider.

     

    If you haven't used the entire £150 balance on an experience, you'll have some money left over on the gift voucher that you'll be able to put towards another experience. 

     

    Important. You'll need to keep at least £1,000 in the linked savings account until you get your code.

  • What can I spend the voucher on?

    You can spend your voucher on a wide range of experiences including:

     

    • Driving track days
    • Afternoon tea
    • Arts and crafts (incl pottery, blacksmithing, jewellery making)
    • Spa days
    • Sports (incl stadium tours, clay pigeon shooting and golf lessons)
    • Flying (incl hot air balloon tours, and flying lessons)

    See the full range of experiences at Virgin Experience Days.

     

    When spending the voucher, be sure to compare prices to how much you'd pay going direct to the provider. Just because you're getting £150 off doesn't mean you're getting a good deal. 

  • How much interest can I earn?

    If you kept at least £1,000 in this account, over a year you'd earn £20 in interest before any tax – assuming the variable interest rate doesn't change.

  • How many accounts can I open?

    There's no set limit, though Virgin Money told us you'd need to have a good reason to open further accounts. When pressed, it suggested that opening another account to get more interest wouldn't be considered a good reason, but opening a joint account with your partner as you liked your individual account would be.

     

    You'll only be able to get one wine offer, even if you open and switch two accounts.

Arranged overdraft cost: 19.9%, 29.9% or 39.9% EAR variable, depending on your "financial circumstances"
Unarranged overdraft cost: 19.9%, 29.9% or 39.9% EAR variable. £4 unpaid transaction fee. Unarranged overdraft charges are capped at £40/mth

APPLY

Nationwide FlexDirect*

2% interest on £1,500 fixed but only for a year, 0.25% afterwards

Apply*

Open a Nationwide FlexDirect* account and you'll get an interest rate of 2% AER fixed for a year on up to £1,500 (so max interest of £29.70). To get the interest, you need to pay in £1,000+/mth. The rate drops to 0.25% after a year, so look elsewhere then to see if it can be beaten.

How Nationwide rates on
service    

75% GREAT
17% OK
8% POOR
DATE: FEB 2021. VOTERS: 518

Minimum monthly pay-in: £1,000/mth to get interest (equates to £12,400 annual salary)
In-credit interest: 2% AER fixed on up to £1,500 for 12 months, 0.25% AER variable on up to £1,500 in subsequent years
Who's eligible for offer: Anyone who hasn't had a FlexDirect account before
Arranged overdraft cost: 0% for newbies in year one; 39.9% EAR variable after (limit depends on credit score) 
Does it have full FSCS savings protection? Yes

  • What if I can't pay in £1,000 each month?

    You just won't be paid any interest that month.

  • How much will the overdraft cost?

    For the first year, your overdraft will cost nothing as long as you stay within your limit and you haven't had a FlexDirect account before. After that, you pay 39.9% EAR variable. So if you had a limit of £1,500 and owed £1,000, you'd pay £28.91 per month for your overdraft.

     

    There are no additional charges for the overdraft, not even if you go over your overdraft limit, though Nationwide says it'll try to stop transactions that take you over the limit. 

     

    If you're switching to this account with an existing overdraft, you could use the 12 months when your overdraft is at 0% to get your finances in order and avoid future fees. For tips, see Cutting Overdraft Costs.

  • Can I have two accounts? And two overdrafts?

    You can have two accounts, and can even get two lots of interest – though one of your accounts must be joint. Nationwide says 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.

Arranged overdraft cost: Year one: 0%. Years two+: 39.9% EAR variable
Unarranged overdraft cost: N/A (Nationwide will try not to let you go over your overdraft limit)

APPLY*

Other interest-paying current accounts

It's not just these accounts that offer decent interest rates. A few others give you varying levels of 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 0.5%.

TABLE_CELL_STYLE

 IN-CREDIT INTEREST (AER) MAX
INTEREST /YR (1)		 MIN MONTHLY PAY-IN HOW MANY CAN YOU HAVE?
Bank of Scotland Vantage 0.6% on up to £3,999.99 and 1.5% on balance between £4,000-£5,000
 £38.90 £1,000 (2) 3
Club Lloyds 0.6% on up to £3,999.99 and 1.5% on balance between £4,000-£5,000.
 £38.90 £1,500 (3) 2 (2nd must be joint)
(1) Before any tax if you always held the max balance+. (2) You need 2+ direct debits going out to get the interest, and must also add the 'Vantage' feature to your account. (3) 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 accounts if you're overdrawn

Overdrafts are debts, and often very expensive debts at that. However, during the coronavirus crisis, all banks need to help customers who are struggling with overdraft interest. See our financial products coronavirus guide for what help might be available to you.

Don't just tackle the symptoms of your overdraft, though – it's important to try and pay it off. See our full Cut overdraft costs guide for tips on how to do this while also cutting costs.

These accounts could help you cut costs over the long term, though do remember that you're not guaranteed to get an overdraft when you apply. We've included links in these reviews to banks' overdraft eligibility checkers, which should help you find out if it's likely, before you apply.

First Direct*

£250 0% overdraft, plus free £125 for switching and GREAT service

Apply*

If you just dip in and out of your overdraft, the First Direct* account should cover you for free, as it offers many a £250 0% overdraft – though it's not guaranteed. Above that you'll pay 39.9% EAR variable. Try First Direct's eligibility checker before applying to see if it might give you an overdraft.

Plus, it currently gives newbies switching to it a free £125. To get it, you'll need to apply, switch and pay in £1,000+ within three months.

First Direct is also a cracking account for service...

How First Direct rates on
service

91% GREAT
6% OK
3% POOR
DATE: FEB 2021. VOTERS: 650

To get bonus: Apply, switch and pay in £1,000+ within three months

Who's eligible for offer: Anyone who's not had any account with First Direct before (or opened an HSBC current account since 1 Jan 2018 – they're part of the same group) and meets switching criteria

When bonus is paid: Within 28 days of meeting criteria

Minimum monthly pay-in: None
In-credit interest: None
Does it have full FSCS savings protection? Shared with HSBC

Arranged overdraft cost: 0% under £250, 39.9% EAR variable above that
Unarranged overdraft cost: 39.9% EAR variable (max £20/mth)

APPLY*

Nationwide FlexDirect*

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

Apply*

The Nationwide FlexDirect* account offers a year's 0% overdraft, as long as you haven't had a FlexDirect account before. It's important that you see this as a respite to try to clear your overdraft, as you start paying a hefty 39.9% EAR variable for it once you've had the account for a year.

There's no guaranteed overdraft limit, and what you get is subject to a credit check, so if you're switching to this account you may not be offered one as large as your existing overdraft. But you can use Nationwide's eligibility checker before applying to see whether you might be able to get an overdraft with it.

How Nationwide rates on
service

75% GREAT
17% OK
8% POOR
DATE: FEB 2021. VOTERS: 518

Minimum monthly pay-in: None (£1,000/mth to get interest)
In-credit interest: 2% in year one on up to £1,500, 0.25% on up to £1,500 after
Arranged overdraft cost: 0% for newbies in year one; 39.9% EAR variable after (limit depends on credit score)
Does it have full FSCS savings protection? Yes

  • How much will the overdraft cost?

    For the first year, your overdraft will cost nothing as long as you stay within your limit and you haven't had a FlexDirect account before. After that, you pay 39.9% EAR variable. So if you had a limit of £1,500 and owed £1,000, you'd pay £28.91 per month for your overdraft.

     

    There are no additional charges for the overdraft, not even if you go above your overdraft limit, though Nationwide says it'll try to stop transactions that take you over the limit.

     

    If you're switching to this account with an existing overdraft, you could 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/mth, 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 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. Nationwide says 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.

Arranged overdraft cost: Year one: 0%. Years two+: 39.9% EAR variable
Unarranged overdraft cost: N/A (Nationwide will try not to let you go over your overdraft limit)

APPLY*

Starling Bank*

Easy-to-control overdraft with a lowish rate, plus no extra charges if you bust your limit

Apply*

While it doesn't offer a 0% overdraft, app-based Starling Bank* has one of the lowest standard overdraft costs of 15% EAR interest (though if your credit history's poor, you could be charged 25% or 35% EAR). If you qualify for one of the lower rates, this is still a good deal, especially compared with other overdraft rates which tend to be bunched at 40%.

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.

Use Starling's eligibility checker before applying to see whether you are likely to qualify for an overdraft with it – though it only asks a few basic questions, so see the result as an indication only, rather than a sure thing.

How Starling Bank rates on
service

93% GREAT
4% OK
3% POOR
DATE: FEB 2021. VOTERS: 110

Minimum monthly pay-in: None
In-credit interest: 0.05% AER variable on up to £85,000
Does it have full FSCS savings protection? Yes

  • What else can the app do?

    As well as providing spending notifications and insights, the app offers various budgeting features to help you manage your money. It also lets you split bills with others, round up transactions for savings and deposit cheques. For more on app-based bank accounts, see our Digital Banking guide.

  • What exchange rate will I get overseas?

    The debit card is a Mastercard, so you'll get the Mastercard rate, which you can check here. There are no fees for using your card abroad, making it a top pick for overseas use.

  • Will Starling credit-check me?

    If you apply for an overdraft, Starling will run a full credit check on you. If you apply for the account without an overdraft, it'll just run an ID check on you, which won't appear to lenders on your credit report (though you'll be able to see it).

     

    However, once you've opened the account, whether with or without an overdraft, it will appear on your credit report as an active account – and other lenders will be able to see it.

Arranged overdraft cost: 15%, 25% or 35% EAR variable. The rate you get depends on your credit history
Unarranged overdraft cost: None

APPLY*

Top bank account for insurance

Below is our top-pick packaged bank account which, for a monthly fee, offers various insurance perks. Always check if it's cheaper to buy the insurance elsewhere before applying, and for more options see Packaged Bank Accounts.

Nationwide FlexPlus* (monthly fee £13 or £156/yr)

£500+/yr of travel, mobile & breakdown cover for £156/yr 

Apply*

Nationwide's FlexPlus* account is a strong deal - especially for families - provided you'll use the features. It also has the lowest monthly fee of our top-pick accounts at £13/mth. That covers:

  • Smartphone insurance for all the family's phones
  • UK & Europe breakdown cover for the account holder(s)
  • Worldwide family travel insurance, including winter sports, up to your 70th birthday (you can pay an additional £65/yr to keep the cover if you're older)

We've calculated that in total the insurance could be worth £500+/yr for a family of four. Read more info on the insurances, incl what Covid cover the travel insurance offers.

How Nationwide rates on
service
75% GREAT
17% OK
8% POOR
DATE: FEB 2021. VOTERS: 518

Monthly fee: £13
Min monthly pay-in: None
In-credit interest: None
Arranged overdraft cost: 39.9% EAR variable
Unarranged overdraft cost: N/A (Nationwide will try not to let you go over your limit)
Does it have full FSCS savings protection? Yes

APPLY*

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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 is in your account.

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

Want to complain about your bank account?

If your bank has 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 to help you complain

This tool helps you draft and manage your complaint. It's totally free to use, and it's offered by Resolver, a firm we work with to help people get complaints justice.

RESOLVER – FREE COMPLAINTS TOOL*

If the company won't help, Resolver also helps you escalate your complaint to the free Financial Ombudsman Service.

Bank account FAQs

Here are some common bank account related queries. If you've got a question we've not answered below or in the text above, suggest a question in the MSE Forum.

  • What do I do if I've sent money to the wrong account?

    When sending money to a different account, many banks now use the Confirmation of Payee scheme, which checks whether the name of the account you are sending money to matches up to the sort code and account number you type in. If the name doesn't match, the bank will let you know so you can amend any errors before making the payment.

    If your bank isn't signed up, it'll be using the old system, where the only information it'll use is the sort code and account number, meaning if these details are wrongly entered the cash could end up in a stranger's bank account.

    If you end up sending money to the wrong account, here's what you need to do and what happens then:

    • Contact your bank straightaway to let it know about the mistake. While banks can't stop payments that have already been made, contacting it as soon as possible will help speed up the process of sorting it out. It’s a good idea to keep a note of all correspondence you have with the bank and also to make note of exactly when the error was made. If you know the mistake you made (eg, you used the wrong sort code), then make a note of that too.

    • Your bank will act within two working days of you telling it. And it doesn't matter if you discovered your mistake after a week or even a year... though it's good financial sense to keep an eye on your account(s) to make sure your payments have reached the right recipient.

    • As long as there are no disputes, your money will be returned within 20 working days. Where there's clear evidence of a genuine mistake, your bank will contact the receiving bank on your behalf requesting that the money isn't mistakenly spent by the person who accidentally received it, and you'll get your money back.

    If there are issues, eg, if the person you accidentally sent it to refuses to return it, you'll be notified of the outcome of the bank's investigation within 20 working days from the point that you let it know.

  • How does it work with reward payments and tax?

    As well as offering in-credit interest or bonuses for switching, some 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.

    A few 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.

    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 personal savings allowance, and they're 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.

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

    In the UK, old, now-dormant accounts hold millions 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.

  • 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. And the direct debit guarantee means you're entitled to a refund if there are any errors in the payment.

    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, as you set them up yourself.

    A recurring payment (or continuous payment authority – CPA) 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 TV streaming service or recipe box. 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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What the * means above
If a link has an * by it, that means it is an affiliated link and therefore it helps MoneySavingExpert stay free to use, as it is tracked to us. If you go through it, it can sometimes result in a payment or benefit to the site. It's worth noting this means the third party used may be named on any credit agreements.

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

Duplicate links of the * links above for the sake of transparency, but this version doesn't help MoneySavingExpert.com: 

First Direct, HSBC, Nationwide FlexDirect, Nationwide FlexPlus, Santander 123 Lite, Starling, Virgin Money

MoneySupermarket.com Financial Group Limited is authorised and regulated by the Financial Conduct Authority (FRN: 303190). The registered office address of both MoneySupermarket.com Group PLC and MoneySupermarket.com Financial Group Limited (registered in England No. 3157344) is MoneySupermarket House, St. David's Park, Ewloe, Chester, CH5 3UZ. MoneySavingExpert.com Limited is an appointed representative of MoneySupermarket.com Financial Group Limited.