TSB Classic Plus current account interest cut to 3%

The bank upped the interest rate from 3% to 5% on balances of up to £1,500 in May 2018 while it was affected by a number of IT problems, but announced in April this year that rates would be dropping back down to 3% from today (2 July).

Customers will now be able to earn a maximum of £45 in interest per year, down from £75 previously. TSB customers can also currently earn £75 by recommending family and friends for a current account as part of its 'refer a friend' scheme, which is running until Wednesday 31 July.

See our Best Bank Accounts guide to find the best interest-paying current accounts and switching incentives, including £175 in cash.

Which current accounts pay the most interest?

Even though TSB is dropping its rates, its current account is still one of the best for interest. The Classic Plus account pays 3% on up to £1,500 as long as you pay in at least £500/month (equivalent to a £6,000 annual salary), are registered for online and paperless banking and log in regularly.

However our top pick is Nationwide, which pays 5% interest on up to £2,500 to new customers of its FlexDirect account.

The interest is paid monthly and you can only earn it if you haven't had a FlexDirect account before and pay in at least £1,000/mth (equivalent to a £12,500 annual salary).

But remember, you'll only get this top rate for a year – after that it drops to 1%, so you should look elsewhere then to see if it can be beaten.

Our Best Bank Accounts guide has more info on the top available rates, including the best accounts for cashback and overdrafts.