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Best Bank Accounts

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Martin

Updated Weekly

If you're unhappy with your bank account, don't groan, moan or whinge – switching has never been easier and you can get £250 in cash to switch or up to £185 in vouchers when you switch and stay as banks lust for your custom.

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

Nine tips to find your best account

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

Switching should now be quick & hassle-free

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

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

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

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

Quick questions

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

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

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

Are recurring payments from my card also moved?

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

Do I HAVE to close my old account when switching?

What day will my switch happen on?

Can I still switch if I'm overdrawn?

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

Can I switch a sole account to a joint account and vice versa?

I have other products like an ISA and credit card with my bank – what will happen to them if I switch away?

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

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

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

For example, £1,000/mth equals a £12,850/yr pre-tax salary. So the best thing to do is to find all the top accounts that meet your minimum monthly pay-in.

Halifax, M&S Bank and HSBC all allow you to get their switching bonuses without paying in a specific amount, though you won't get their ongoing rewards unless you pay in £750/mth, £1,000/mth & £1,750/mth respectively.

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

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

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

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

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

The majority of accounts in this guide fall into two categories. The first lot pay you a one-off bonus of up to £250 to switch to them. The second pay interest on varying balances within your current account. But which type's better for you?

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

Our message now is one of chasing short-term cash gains. As the interest-paying providers have shown, loyalty doesn't pay. Now the bonus-paying accounts will have their time, as they pay up to £250 when you switch to them. And some even give ongoing rewards on top. This is important, as the switch bonuses themselves are a one-off payment, so if you won't switch again you can still get rewarded for staying.

But, if you want somewhere guaranteed for your savings, Nationwide FlexDirect pays 5% AER fixed for a year on £2,500, which'd give you a maximum £122.25 interest, or Tesco Bank pays at least 3% AER on £3,000 guaranteed until April 2019, netting £88.80 per year.

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

Quick questions

How often can I switch?

Where could I save otherwise?

Do you pay tax on savings interest?

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

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

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

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

Quick questions

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

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

Can you change the dates your bills go out?

Does your account give you a 0% overdraft buffer?

What could I be charged for using my overdraft?

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

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

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

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

Quick question

Could you be rejected when applying for a bank account?

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

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

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

Quick questions

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

How do you open a basic bank account?

Avoid going into your unauthorised overdraft or banks turn nasty

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

If you are overdrawn and flirting with your limit, don't just tackle the symptoms. Try using the free Budget Planner, give yourself a Money Makeover to cut bills, and 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?

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

parcel tied up with string

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

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

Quick questions

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

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

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

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

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

Top accounts with free cash for switching

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

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

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

...you're always in credit

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

...you want quick-ish cash for something

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

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

...you're regularly overdrawn

...you don't want to fully switch and close your old account using the switching service

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

Clydesdale Bank Current Account

New. Biggest upfront bonus we've EVER seen - free £250 to switch

Clydesdale Bank* / Yorkshire Bank*

The Current Account Plus from Clydesdale Bank* / Yorkshire Bank* (they both offer the same account) has launched a massive £250 switch incentive, which is the biggest upfront offer we've ever seen. It's likely to be a popular deal, so there are no guarantees that the offer will last long.

You can also get the offer with Clydesdale's new app-based B Account*. For full details see our Digital Banking guide.

Need-to-knows
  • You must use the Current Account Switch Service and choose a completion date within 31 days of requesting the switch. You'll need two direct debits on the account, which can be switched or set up after you've switched. They must both be paid out within 62 days of the switch completing and not be cancelled before receiving the bonus.
  • You also need to pay in £1,000 within 31 days of the switch completing, and another £1,000 in the 31 days after that, and log in to internet or mobile banking within that time.
  • The £250 will be paid within 70 days of your switch completing.
  • You can't get the bonus if you've ever received a switch incentive from Clydesdale or Yorkshire Bank.
  • Clydesdale Bank, Yorkshire Bank and B share the £85,000 UK savings safety guarantee, so don't hold more than £85,000 across the three.
Stats box
  • Minimum monthly pay in: None (£1,000 to get the bonus)
  • In-credit interest: None
  • App: You can download it for iOS (rated 2.5/5) and Android (rated 2.9/5)
  • Arranged overdraft cost: £25 buffer then £6/mth usage cost plus 18.85% EAR variable
  • Unarranged overdraft cost: £10 buffer; then £6/day. £15 unpaid item fee (max £100/mth)
Key questions

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

Do I need to close my existing account? Yes, to get the switching bonus you'll need to complete a full switch, which includes the closure of the account you're switching from. You need to use the Current Account Switch Service, which closes your old account automatically this is done automatically, and all payments in and out are moved across to the new account.

HSBC Bank Account

Free £150 to switch PLUS £50 if you stay, though high min pay-in

HSBC Advance*

Open and switch to HSBC's Advance Account* and you'll get £150 and if you stay for a year, you'll get a further £50 bonus. Note, the HSBC account has a high minimum monthly pay-in – £1,750 a month – so consider whether you'll be able to meet this before opting for it.

Need-to-knows
  • You must open the account by 26 Nov, then start a full switch using HSBC's Current Account Switch Service, including at least two direct debits or standing orders, within 30 days. To switch, you'll need a branch or phone appointment – HSBC should call you within two working days to arrange this, though it's worth calling if you don't hear by then.
  • The bonus is paid into your account within 50 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 your current bank isn't signed up to CASS, you can still get the bonus by doing a manual switch. See key questions for more.
  • If you qualify for the £150 bonus payment, you'll also get a 0% overdraft for six months when you open the account, though the limit you get is credit score dependent.
  • If you want to get the £50 extra bonus, you need to register for mobile or online banking within 60 days of account opening, plus you'll need to pay in £1,750/mth for at least nine of the first 12 months. It'll be sent within 30 days of your first anniversary of account opening.
  • You'll be eligible to get HSBC's 5% regular savings account.
  • The switch bonus is also available if you're switching to HSBC's Premier Account. But you'll need to either pay your income in to it and have £50,000 of savings/investments with HSBC; or have an income of £100,000+ a year, plus another qualifying product with HSBC, to get the account.
  • HSBC shares its £85,000 UK savings safety guarantee with First Direct, so ensure you don't hold more than £85,000 across the two banks.

How HSBC rates on service (in credit)

46% great

37% okay

17% poor

Date: Aug 2017 Voters: 381

Stats box
  • Minimum monthly pay-in: £1,750 (equates to £26,100 annual salary)
  • In-credit interest: None
  • App: You can download it for iOS (rated 2/5) and Android (rated 3.4/5).
  • Arranged overdraft cost: 0% for the first six months, then 17.9% EAR
  • Unarranged overdraft cost: £10 buffer, then 17.9% EAR interest, plus £5/day charge each day you're overdrawn (max £80/month)
Key questions

What if I can't pay in £1,750/mth? You need to pay this in for at least nine of the first 12 months after switching to get the full bonus. But if you can't continue to pay it in afterwards, the account will just change to a 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.

Do I need to close my existing account? Yes, to get the switching bonus you'll need to complete a full switch, which includes the closure of the account you're switching from. If you use the Current Account Switch Service, this is done automatically, and all payments in and out are moved across to the new account.

My current bank isn't signed up to the Current Account Switch Service. Can I still get the switching bonus? Yes, you can. Most bank switching offers are only available if you use CASS to switch to them, but HSBC has made an exception for this offer.

You'll need to ask in branch for a manual switch, which takes 12 working days, and give clear instructions for your existing account to be closed within 30 days of your HSBC account being opened. You must also switch two direct debits or standing orders.

Are there any other perks to the Advance current account? The account itself doesn't have extra benefits, but you'll be eligible to open HSBC's 5% regular saver and get discounts on other products, including mortgages and loans.

First Direct

Switch to the no.1 rated bank for customer service + get £125

First Direct*

Apply via our link and First Direct* offers £125 if you switch to it. It's one of our top picks due to its excellent customer service – it's won every bank service poll we've ever done, with 90% of its customers rating it 'great'. You also get a small £250 0% overdraft, and can open a linked 5% regular saver.

Need-to-knows
  • To get the £125 switching bonus, open an account via our link by 11 Dec then use First Direct's switching service to fully switch and close your existing account and pay in at least £1,000 within three months of your account opening.
  • Once you've made the payment, the £125 will be credited to your account within 28 working days.
  • If you have any problems with the switching process, you can contact First Direct's account opening team on 0800 24 24 24.
  • This account has a £10 monthly fee after six months, but this is waived each month you pay in £1,000, have an average monthly balance of £1,000 or hold selected other accounts with First Direct.
  • We've confirmed with First Direct that Norwich & Peterborough customers who are having their accounts closed can get the bonus by completing a manual switch. See key questions for more.
  • You can't get the switching bonus if you've ever held an account with First Direct before.
  • 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.
Rated 1st  ribbon

How First Direct rates on service

90% Great

7% okay

3% poor

Date: Aug 2017 Voters:841

Stats box
  • Minimum monthly pay-in: £1,000 (equates to an annual salary of £12,850) to avoid £10/mth fee unless you meet selected other criteria
  • In-credit interest: None
  • App: You can download it for iOS (rated 4.5/5) and Android (rated 3.1/5).
  • Arranged overdraft cost: 0% under £250, 15.9% EAR above that
  • Unarranged overdraft cost: £10 buffer then £5/day (max £80/mth)
Key questions

How do I get the £125 switching bonus? Once you've opened and been accepted for the account, you have three months to complete your switch and pay in £1,000. Once you've done that, the £125 bonus will be paid within 28 working days.

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

Do I need to close my existing account? Yes, to get the switching bonus you'll need to complete a full switch using the Current Account Switch Service, which automatically closes the account you're switching from and moves across all payments in and out.

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

I'm a Norwich & Peterborough customer and my current account's being closed. Can I still get the bonus? Yes, you can. Even though Norwich & Peterborough isn't part of the Current Account Switch Service, First Direct has told us that customers whose accounts are being closed will be able to get the switching bonus. Just open an account then call First Direct on 0345 6100 100 to ask it to do a manual switch. You'll still need to pay in £1,000 to be eligible for the bonus.

Are there any other perks? You can sign up to First Direct's Visa Offers scheme, which gives tailored cashback deals at selected retailers based on your spending habits. Once signed up, cashback is paid automatically within five working days of each valid spend.

M&S Bank Current Account

Free £125 gift card which can be boosted by £5/mth for a year – good if you shop at M&S

M&S Bank*

The M&S Bank* Current Account gives you 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 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. 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.
  • You need to switch at least two active direct debits to qualify for the bonus (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.
  • You must not have previously switched a current account to M&S to be eligible for the bonus.
  • There's no minimum monthly pay-in to get the £125, but if you want the extra £5/mth you must pay in £1,000 each month, and keep 2+ direct debits active.
  • There's a linked 5% regular saver account that you can open when you've switched to this account, as long as you have two active direct debits.
  • Branches are in larger M&S stores, so have longer opening hours than some other banks.
  • If your current bank isn't signed up to CASS, you can still get the bonus by doing a manual switch. See key questions for more.
  • M&S Bank has the full £85,000 UK savings safety guarantee.
Stats box
  • Minimum monthly pay-in: None (£1,000 for £5 monthly payment)
  • In-credit interest: None
  • App: You can download it for iOS (rated 1/5) and Android (rated 1.5/5).
  • Arranged overdraft cost: 0% up to £100, 15.9% EAR above that
  • Unarranged overdraft cost: £50 buffer, 15.9% EAR interest. M&S Bank only allows you to go £50 over your overdraft limit.
Key questions

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

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

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

When do I get the £125 gift card? If accepted, you'll either need to call M&S Bank or go into a branch within three months to complete your switch. Once you've completed the switch, you'll get the gift card and voucher within a calendar month.

How do I get the £5 monthly payment? As long as you've switched your account, including at least two active direct debits, and pay in £1,000 each month, you'll get an additional £5 credited to your gift card every month for the first 12 calendar months after receiving your initial bonus. The card will be topped up by the 15th of the following month.

Do I need to close my existing account? Yes, to get the switching bonus you'll need to complete a full switch, which includes the closure of the account you're switching from. If you use the Current Account Switch Service, this is done automatically, and all payments in and out are moved across to the new account.

My current bank isn't signed up to the Current Account Switch Service. Can I still get the switching bonus? Yes, you can. Most bank switching offers are only available if you use CASS to switch to them, but M&S Bank has made an exception for this offer. This means that Norwich & Peterborough customers whose accounts are being closed will be able to get the switching bonus. Just complete a manual switch, including two active direct debits, for the £125 gift card, and deposit at least £1,000 per month for the extra £5/mth.

Halifax Reward Bank Account

Free £125 cash paid quickly, plus £3/mth

Halifax Reward

The Halifax Reward account gives you £125 to switch to it and is the quickest bank to pay its bonus, promising it by the time your switch completes. You can also get ongoing rewards of £3 per month if you meet minimum pay-in and direct debit criteria.

Need-to-knows
  • You need to start the switch by 11.59pm on Mon 13 Nov to get the £125 bonus.
  • You'll get the bonus paid into your account before the switch has completed.
  • To get the £3/mth reward, 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.
  • Halifax shares its £85,000 UK savings safety guarantee with the rest of the HBOS group, so don't hold more than £85,000 across the group.

How Halifax Reward rates on service

54% Great

38% okay

8% poor

Date: Aug 2017 Voters: 285

Stats box
  • Minimum monthly pay-in: None (£750 for £3 monthly payment)
  • In-credit 'interest': £3/mth
  • App: You can download it for iOS (rated 4.5/5) and Android (rated 4.4/5).
  • Arranged overdraft cost: No fees for 6mths if you switch. £50 buffer; then charges are tiered. Up to £2k: £1/day. £2k-£2,999: £2/day. Over £3k: £3/day.
  • Unarranged overdraft cost: £5/day (max £95/mth)
Key questions

What if I can't pay in £750 every month? If you miss a month's pay-in, you don't earn the £3. You won't face any other penalties.

What if I don't have two direct debits? As long as you use Halifax's current account switching service you'll still earn the £125 switching bonus, but without two direct debits, you won't earn the £3 a month reward. But, you could consider setting up direct debits, even if it's just £1/mth to charity, to get the reward.

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

This means that Halifax pays you with basic-rate tax deducted. So, if you're a non- or higher-rate taxpayer, you should claim extra 'interest' using the R40 form or pay more via tax returns (see Interest Rates Guide).

Do I need to close my existing account? Yes, to get the switching bonus you'll need to complete a full switch using the Current Account Switch Service, which automatically closes the account you're switching from and moves across all payments in and out.

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

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

Top accounts for savers (high interest)

Only a few years ago, several banks launched high-interest current accounts. But, following last August's Bank of England base rate cut, there's been a shake-up in the market, with several banks cutting the rates on their high interest accounts.

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

But here are the top deals for accounts paying interest – but remember all interest rates are variable (unless stated) so could drop further in future...

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

...you're always in credit.

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

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

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

...you're regularly overdrawn.

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

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

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

Nationwide

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
  • Nationwide has told us it has no plans to change the rates on this account. Plus, because the rate is fixed, provided it's still at 5% when you apply for the account, you know that's the rate you'll get for the first year.
  • To get the interest, you'll need to pay in £1,000+ per month.
  • If you refer a friend and they successfully switch to a Nationwide current account you will both receive £100. You can be paid for referring up to 5 friends per tax year.
  • This account also offers a 12mth 0% overdraft (as long as you haven't had a FlexDirect account in the last year), 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.
Rated 2nd ribbon

How Nationwide rates on service

74% Great

20% okay

6% poor

Date: Aug 2017 Voters: 826

Stats box
  • Minimum monthly pay-in: £1,000/mth to get interest (equates to an annual salary of £12,850)
  • In-credit interest: 5% AER fixed in year one on up to £2,500, 1% in subsequent years
  • App: You can download it for iOS (rated 3.5/5) and Android (rated 3.7/5).
  • Arranged overdraft cost: Year one: 0%; years two+: £10 buffer, then 50p/day
  • Unarranged overdraft cost: Under £10: 50p/day, over £10: £5/day (max £60/mth), £5 paid/unpaid item fee (max £35/mth). Total unarranged fees capped at £95/month.
Key questions

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

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

How much will the overdraft cost? For the first year, your overdraft will cost nothing so long as you stay within your limit and you haven't had a FlexDirect account in the last year. After that, you pay 50p per day you're overdrawn (within your limit). So, if you have a limit of £1,500 and owe £1,000, then you'll pay £182.50 if you're overdrawn every day of the year.

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

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

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

Are there any other perks? You can sign up to Nationwide's Simply Rewards scheme, which gives tailored cashback deals at selected retailers based on your spending habits. Once signed up, cashback is paid automatically within five working days of each valid spend.

Tesco Bank

Good for Tesco shoppers – 3% on £3,000 fixed until April 2019 + 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 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.
  • Service is good, with 71% of Tesco Bank customers in our recent poll rating it 'great', though we had a limited number of votes.
  • Tesco Bank has the full £85,000 UK savings safety guarantee.
Stats box
  • Minimum monthly pay-in: £750
  • In-credit interest: 3% AER variable under £3,000. Nothing above.
  • App: You can download it for iOS (rated 2.5/5) and Android (rated 3.5/5).
  • Arranged overdraft cost: 18.9% EAR
  • Unarranged overdraft cost: 18.9% EAR; £5 paid item fee; £5 unpaid item fee (max £50 per statement)
Key questions

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

How many Clubcard points could I get? On top of your normal Clubcard points, you also earn 1 point per £1 spent in Tesco until 1 April 2019 and 1 point per £8 spent elsewhere on your Tesco debit card. We've crunched the numbers to see how much this could be worth, assuming you take advantage of Clubcard Boost to get 4x value for your points.

Annual spend £3,000 £5,000 £10,000 £20,000
Number of Clubcard points earned (1) 1,030 1,720 3,440 6,870
Value of Clubcard points (2) £41 £68 £137 £275
(1) Assumes 25% of spend in Tesco and 75% elsewhere. (2) Assumes you use Clubcard Boost to get 4x value
Bank of Scotland

2% interest on £5,000 (+ trick to get it on £15k)

Bank of Scotland Vantage

The Bank of Scotland Classic Account pays 2% AER variable on balances between up to £5,000. There is a trick in that the rules allow you to open three accounts, giving you 2% on £15,000. You'll still need to meet the criteria on each though – see our multiple account tips below for help.

Need-to-knows
  • The interest doesn't automatically come with the account – you need to add the 'Vantage' feature to the account to get it. You can do this during your application.
  • You'll need to pay in £1,000/mth, stay in credit, and have two different direct debits paid from the account(s) each month to get the interest.
  • You earn 2% AER variable interest on all balances between £1 and £5,000.
  • Bank of Scotland shares its £85,000 UK savings safety guarantee with Halifax.
  • Multiple accounts tip one: Some MoneySavers have found issues when trying to open the second or third accounts too quickly. Waiting 48 hours between each and calling instead of applying online seems to make things easier.
  • Multiple accounts tip two: You can recycle £1,000 to meet the pay-in criteria – simply set up a standing order to move it from account one to account two, then two days later to account three, but remember to keep cash in to pay the direct debits.
  • Multiple accounts tip three: If you don't have enough direct debits, set up small direct debits to specific savings accounts or even to charity. Bank of Scotland doesn't care where the money's going, as long as they're direct debits. See full alternatives.
  • This account has a linked 2% regular saver, though this can be beaten by other regular saver accounts.
Stats box
  • Minimum monthly pay-in: £1,000 (equates to £12,850 annual salary)
  • In-credit interest: 2% AER variable between £1 and £5,000; nothing above £5,000
  • App: You can download it for iOS (rated 4.5/5) and Android (rated 4.3/5).
  • Arranged overdraft cost: £25 buffer, then 19.89% EAR + £6/mth usage fee
  • Unarranged overdraft cost: £10 buffer, then 19.89% EAR with charges of £5/day between £10 and £25 over limit, £10/day for £25+ (max £80/mth) plus £6/mth usage fee; £10 unpaid item fee (max three/day)
Key questions

How much interest can I earn? You can earn 2% AER on balances up to £5,000 in the account. Put and keep the full £5,000 in, and you'll get £99.

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

I've been asked to bring documents to a branch but I don't live in Scotland. What can I do? When applying, it's possible that Bank of Scotland may ask you to bring in some documents (normally if it can't ID-check you based on details you enter when you apply). Branches are only in Scotland, but if you live elsewhere in the UK, you can take them into a Halifax branch, where they should be able to make a copy and send them on.

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.

The top current account savings interest
For comparison, the top easy-access savings deal open to all pays just 1.27%.
In-credit interest (AER) Max
interest /yr (1)
Min monthly pay-in How many can you have?
TSB Classic Plus 3% on up to £1,500 £44 £500 2 (2nd must be joint)
Club Lloyds 2% on up to £5,000 £99 £1,500 (2) 2 (2nd must be joint)
(1) Before any tax if you always held the max balance+. (2) 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.

Top accounts with ongoing cashback

Some accounts give you free cash for paying bills, or for using the account regularly. However, many of them come with a fee, so check you spend enough on bills to cover the monthly fee (if it has one) before going for one of these.

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

...you want cashback for using the account

...you pay your bills by direct debit

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

...you just want upfront cash for switching

...you don't have or use direct debits

Santander

1-3% cashback on bills and cheapest fee of the cashback accounts

Santander 123 Lite*

The Santander 123 Lite* gives 1-3% cashback on seven different bills, including council tax, water and energy, as long as you pay by direct debit, for a monthly fee of £1. If you have a Santander mortgage then you could get up to £10/mth cashback on that, which gives seriously good returns on this account.

If you have high bills and don't use mobile payments, then 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.

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

How Santander rates on service

63% Great

30% okay

7% poor

Date: Aug 2017 Voters: 1,102

Stats box
  • Minimum monthly pay-in: £500 (equates to £6,000 annual salary)
  • In-credit interest: None
  • App: You can download it for iOS (rated 3/5) and Android (rated 4.2/5).
  • Arranged overdraft cost: 0% for four months after switching. Then, £12 buffer and £1/day below £2,000, £2/day from £2,000-£2,999.99 and £3/day over £3,000.
  • Unarranged overdraft cost: £12 buffer then £6/day (max £95/mth)
Key questions

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

How much cashback could I really earn? We've crunched the numbers on how this stacks up for low, average and high bill payers. After the fee, we worked out low users would be up by £66 a year, average users £138 and high users £252, assuming they have a Santander mortgage. Without a Santander mortgage, low users would be up by £36 a year, average users £72 and high users £132.

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

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

Natwest Reward Account logo

Flat 2% cashback rate on the same bills as the accounts above

NatWest*

If you don't have a Santander mortgage and have high monthly bills, then NatWest's* Reward Account could beat the Santander account above. For a £2 monthly fee, it will pay you a straight 2% cashback on the same bills, including council tax, water and energy, as long as you pay by direct debit.

Note the fairly high minimum monthly pay-in – £1,500/month – so consider if you'll be able to meet this before you apply.

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, 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 Caffθ Nero or a donation to one of four charities (Barnardo's, Cancer Research UK, Macmillan Cancer Support or NSPCC).
  • RBS also offers the same account, though you have to live in Scotland and apply in branch.
  • NatWest has the full £85,000 UK savings safety guarantee.

How NatWest rates on service

47% great

39% OK

14% poor

Date: Aug 2017 Voters: 455

Stats box
  • Minimum monthly pay-in: £1,500 (equates to an annual salary of £21,650)
  • In-credit interest: None
  • App: You can download it for iOS (rated 3.5/5) and Android (rated 4.6/5).
  • Arranged overdraft cost: £10 buffer, then £6/month fee plus 19.89% EAR interest
  • Unarranged overdraft cost: £10 buffer, then £8/day fee (max charges of £72 per month) plus £8 unpaid item fee (max one per month)
Key questions

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

How much cashback could I really earn? We crunched the numbers on how this stacks up for low, average and high bill payers. After the fee, we worked out low users would be up by £30 a year, average users £66 and high users £135.

Plus, our poll showed that some people spend even more on their bills, with 1.5% stacking up an annual cashback of at least £216.

As long as the bills are for personal (not business) household use, there is no cap on the cashback amount you can earn, eg, if you pay a child's mobile phone bill from the account as well as your main mobile and electricity bills, you'll also earn 2% back on those, which could boost your earnings.

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

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

TSB Classic Plus

Up to £10/mth cashback until June 2018 plus 3% interest on £1,500

TSB Classic Plus*

The TSB Classic Plus* pays you £5 every month you have two or more direct debits paid out from the account, so it's a good return if you have few bills or low bills. You can also get another £5/mth cashback if you use your debit card at least 20 times in that month.

The account also pays 3% AER variable on the first £1,500 in your account. All these perks mean you could earn around £165 if you switch and keep the account for a year.

Need-to-knows
  • Both cashback offers are available until 30 June 2018, meaning you could get a maximum of £90 cashback before then.
  • The 20 transactions need to be made within a calendar month – the date of transaction will be when the money's taken from your account, which could be a couple of days after you spend. Online, contactless and Apple and Android Pay transactions count, but ATM withdrawals don't.
  • The direct debits need to go out within the calendar month (so watch out for bank holidays & weekends), and need to be paid to different companies.
  • You'll need to pay in £500/mth, register for internet banking (and log in at least once a year) & opt for paperless statements & correspondence to get the interest. You need to be registered for internet banking for the direct debit cashback.
  • This offer's for accounts opened after 1 March 2017 – you won't be able to get it if you had an existing account before this.
  • If you have more than one account, you can get the cashback on both, provided you meet the criteria on each account.
  • This account has a linked 2% regular saver, though this can be beaten by other regular saver accounts.
  • TSB has the full £85,000 UK savings safety guarantee.

How TSB rates on service

64% Great

27% okay

9% poor

Date: Aug 2017 Voters: 379

Stats box
  • Minimum monthly pay-in: £500 (equates to an annual salary of £6,000)
  • In-credit interest: 3% AER variable under £1,500.
  • App: You can download it for iOS (rated 1.5/5) and Android (rated 1.9/5).
  • Arranged overdraft cost: Up to £25 fee-free and £10 buffer, then 19.84% EAR + £6/mth usage fee
  • Unarranged overdraft cost: £10 buffer, then 19.84% EAR with charges of £5/day under £25, £10/day for £25+ (max £80/mth) plus £6/mth usage fee; £10 unpaid item fee (max three/day)
Key questions

How much interest can I earn? You can earn 3% AER on the first £1,500 in the account, but no interest on anything over that amount. Put and keep the full £1,500 in and you'll get £44.40 per year.

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

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

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.
  • Danske Bank's Cash Reward account has a £2 monthly fee, but pays £7 each month you pay in £1,200+, pay out at least three direct debits and log on to online/mobile/tablet banking at least once. Branches are in Northern Ireland, but you can open an account over the phone even if you don't live there – just be aware that you won't have access to branch banking in the rest of the UK.
  • Barclays Blue Rewards is an add-on to Barclays current accounts which, for a £3 monthly fee, will pay you at least £7/month 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 account if you want insurance

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

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

...you're always in credit

...you genuinely need the associated insurance

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

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

...you are regularly overdrawn

...you don't need the insurance

...you can find the associated insurance cheaper elsewhere

Nationwide

Up to £600 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), smartphone insurance for all the family (at the same address) and UK & Europe breakdown cover.

You also get 3% AER variable interest on up to £2,500, meaning you could earn £74 in interest each year. Nationwide has recently increased the monthly fee and tweaked some features of the account, but it's still one of our top picks.

Need-to-knows
  • The travel insurance covers worldwide trips (including golf, business and winter sports) for all family members 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 family members 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 £600 or more. Here's how we worked this out
  • 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 you will both receive £100. You can be paid for referring up to five friends per tax year.
Stats box
  • In-credit interest: 3% AER variable up to £2,500
  • Min monthly pay-in: None
  • App: You can download it for iOS (rated 3.5/5) and Android (rated 3.7/5).
  • Arranged overdraft cost: 3 months fee-free, £250 fee-free buffer after, 50p per day above that
  • Unarranged overdraft cost: Up to £10 charged 50p/day. Over £10 charged £5 per day (max £50/month)
Key questions

What does the worldwide family travel insurance cover? It allows multiple trips worldwide and includes winter sports, business, wedding and golf cover (includes golf fees). The cheapest you could normally get worldwide family travel insurance for is £60, but for a top value policy like this you could pay £180 per year (read our full Travel Insurance guide).

It'll cover you, children under 19 (or 22 if in full-time education) providing they live at the same address, and your partner, even if it's not a joint account. The excess (the amount you pay towards a claim) is a maximum of £50. If you've a pre-existing condition, tell Nationwide as you may need a medical screening before getting cover and could be charged.

I'm over 75. What about me? If you're 75 or over, you'll need to pay a £50/yr premium for your travel cover. This isn't necessarily the best deal on the market, so always compare with the premiums in Cheap Travel Insurance.

What does the mobile phone insurance cover? It covers repair or replacement after theft, loss or damage, insuring each handset up to the value of £1,000, so it'll cover all smartphones. The excess is a maximum of £100 for an iPhone. Unusually, it covers the phones of all family members, provided they live with you (children must be under 19 or under 22 if in full-time education, and cannot be married or in a civil partnership) – so maxed out, this gives serious value. You can make a maximum of four claims per year. See Mobile Insurance for more details.

What does the breakdown cover include? It's for the UK and Europe including home assistance and onward travel. Cover is for the person, and people travelling in your vehicle (so everyone would be taken to their destination). On a joint account both account holders would be covered.

For more policy details, see the travel insurance, mobile insurance and UK & Europe breakdown cover documents.

Can I use the card abroad? The debit card with the account has no fee or load for cash withdrawals abroad, making it a leading debit card for overseas use. But it still has a 2% charge when using it for overseas purchases, so don't use it for this. Instead, for overseas purchases, if you have the FlexPlus account, you're also eligible for the Nationwide Select credit card. It gives 0% load on overseas purchases, as well as 0.5% cashback on UK spending and 12 months 0% on balance transfers and purchases.

How is the bank rated? In our Aug 2017 poll, Nationwide was voted 'great' by 74% of voters, while 20% said it was 'OK' and 6% 'poor'.

Top accounts if you're overdrawn

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

But if you are overdrawn, don't just tackle the symptoms. Also try using the free budget planner, give yourself a money makeover to tackle its causes and check our Cut Overdraft Costs guide.

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

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

...you're regularly or always overdrawn

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

...you're always in credit

First Direct logo

£250 0% overdraft, plus free £125 when you switch to the account

First Direct*

If you just dip in and out of your overdraft, the First Direct* account should cover you for free, as it has a £250 0% overdraft. Plus, if you apply via our link and do a full switch to it, you get £125 free cash which you could put towards your overdraft to help you pay it off.

It's also the best account for service, with 90% saying they had 'great' service from First Direct in our last poll

Need-to-knows
  • If you go more than £250 into your overdraft, you pay interest of 15.9% EAR, making it one of the lower-cost overdrafts on offer.
  • You need to pay in £1,000+ each calendar month, or maintain an average monthly balance of £1,000 to keep the account free (£10 otherwise).
  • First Direct will pay you a bonus of £125 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.
  • If you qualify, the £125 will arrive within 28 days of your switch completing.
  • You can't get the switching bonus if you've ever held an account with First Direct before.
  • 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.
Rated 1st  ribbon

How First Direct rates on service

90% Great

7% okay

3% poor

Date: Aug 2017 Voters:841

  • Minimum monthly pay-in: £1,000 (equates to an annual salary of £12,850)
  • In-credit interest: None
  • App: You can download it for iOS (rated 4.5/5) and Android (rated 3.1/5).
  • Arranged overdraft cost: 0% under £250, 15.9% EAR above that
  • Unarranged overdraft cost: £10 buffer then £5/day (max £80/mth) plus 15.9% EAR

How do I get the £125 switching bonus? Once you've opened and been accepted for the account, you have three months in which to complete your switch and pay in £1,000. Once you've done that, the £125 bonus will be paid within 28 days.

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

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

Are there any other perks? You can sign up to First Direct's Visa Offers scheme, which gives tailored cashback deals at selected retailers based on your spending habits. Once signed up, cashback is paid automatically within five working days of each valid spend.

Nationwide

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

Nationwide FlexDirect

If you're often or always in your overdraft, you'll be used to paying interest or charges. But 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 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 in the last 12 months.
  • You also get access to a linked 5% regular saver.
  • Nationwide has the full £85,000 UK savings safety guarantee.
Rated 2nd ribbon

How Nationwide rates on service

74% Great

20% okay

6% poor

Date: Aug 2017 Voters: 826

Stats box
  • Minimum monthly pay-in: None (£1,000/mth to get interest)
  • In-credit interest: 5% in year one on up to £2,500, 1% in subsequent years
  • App: You can download it for iOS (rated 3.5/5) and Android (rated 3.7/5).
  • Arranged overdraft cost: Year one: 0%; years two+: £10 buffer, then 50p/day
  • Unarranged overdraft cost: Under £10: 50p/day, over £10: £5/day (max £60/mth), £5 paid/unpaid item fee (max £35/mth). Total unarranged fees capped at £95/month.
Key questions

How much will the overdraft cost? For the first year, your overdraft will cost nothing so long as you stay within your limit and you haven't had a FlexDirect account open within the last year. After that, you pay 50p per day you're overdrawn (within your limit). So, if you have a limit of £1,500 and owe £1,000, then you'll pay £182.50 if you're overdrawn every day of the year.

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

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

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

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

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

Starling Bank

Easy-to-control overdraft with a low-ish 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.

Starling Bank is a new challenger bank, which opened applications to its current account in May 2017. For now it has no fees, though it's possible that this'll change in the future.

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.
Stats box
  • Minimum monthly pay-in: None
  • In-credit interest: 0.5% AER variable on up to £2,000. 0.25% between £2,000 and £85,000.
  • App: You can download it for iOS (rated 4/5) and Android (rated 4/5).
  • Arranged overdraft cost: 15% EAR variable (waived if less than 10p in any month).
  • Unarranged overdraft cost: 15% EAR variable (waived if less than 10p in any month). Max £2/mth
Key questions

What else can the app do? As well as providing spending notifications and insights, the app lets you freeze and unfreeze your debit card at the touch of a button, report it lost or stolen or get a PIN reminder in-app. You can also turn off certain functions of your card like online spending, contactless payments or ATM withdrawals if you want to control a specific type of spending.

Starling has just launched its 'Marketplace', which lets you use other companies' services through the Starling app. There's only one company featured at the moment, but in the future it'll offer things like ISAs, savings accounts, insurance and mortgages.

Are there limits on using the debit card? You can make up to three cash withdrawals a day, totalling a maximum of £300.

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 to use 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 just 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).

Is my money protected? Yes, Starling Bank has full FSCS protection, so your money saved with it is safe up to £85,000.

Ethical bank accounts

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

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

...you're always in credit.

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

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

...you're regularly or always overdrawn;

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

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

Full ethical consumer

Get 5% interest for a year or cheap foreign spending

Top Rated Ethical Bank Accounts


Other high-scoring ethical providers

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

Cashback sites may pay you for signing up

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

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

Want to complain about your bank account?

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

Free tool if you're having problems

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

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

Q&A Bank accounts

  • How does it work with reward payments and tax?

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

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

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

  • How do I find my local branch?

  • How long do transfers take?

  • How long does a cheque take to clear?

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

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

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

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

  • Is internet and mobile banking safe?

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