Nationwide FlexAccount
Account Fee & Requirements
No monthly fee
Overdraft
18.9% EAR
(£15 buffer)
Headline Interest
0% AER
Free Multi-trip European travel insurance. No monthly fee. Independently rated 5-star by Defaqto. Access to a range of exclusive offers.
To qualify as a main current account holder you must pay in a minimum of £750 per month.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 18.9% EAR (variable).
NatWest Select Account
Account Fee & Requirements
No monthly fee
Overdraft
19.89% EAR
(£10 buffer)
Headline Interest
0% AER
Earn 1% cashback on contactless payments with Cashback Plus. Voted the best card benefits programme of the year at the Card and Payment Awards.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 19.89% EAR (variable) + £6 per month.
Lloyds Bank Club Lloyds
Account Fee & Requirements
No monthly fee
pay in £1,500+ a month
Overdraft
£100 interest
& fee free, then 19.94% EAR
Headline Interest
4% AER
(£4,000 to £5,000)
As long as you pay £1,500 or more into your account each month, Lloyds will waive the £5 Club Lloyds monthly fee. If in any month you don't pay in this amount, you will need to pay the monthly fee.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 19.94% EAR (variable) + £6 per month.
RBS Select Account
Account Fee & Requirements
No monthly fee
Overdraft
19.89% EAR
(£10 buffer)
Headline Interest
0% AER
Earn 1% cashback on contactless payments with Cashback Plus. Voted the best card benefits programme of the year at the Card and Payment Awards.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 19.89% EAR (variable) + £6 per month.
Clydesdale Bank Current Account Direct
Account Fee & Requirements
No monthly fee
pay in £1,000+ a month
Overdraft
9.9% EAR
(£10 buffer)
Headline Interest
2% AER
(£1 to £3,000)
£150 to switch your banking - once you've made a single payment of £1,000 or more, within 31 days of switching. Use the Current Account Switch Service to transfer your main bank account & close your old account. T&Cs apply.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 9.9% EAR (variable) + £6 per month.
TSB Classic Plus
Account Fee & Requirements
No monthly fee
pay in £500+ a month
Overdraft
£25 (+ £10 buffer) interest
& fee free, then 19.94% EAR
Headline Interest
5% AER
(£1 to £2,000)
To earn 5% AER you must credit your account with £500 each month, register for internet banking, paperless statements and paperless correspondence. TSB Classic Plus has a Defaqto 5 Star Rating.
£25 interest and fee free overdraft subject to application and approval.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 19.94% EAR (variable) + £6 per month.
The Co-operative Bank Current Account
Account Fee & Requirements
No monthly fee
Overdraft
18.9% EAR
Headline Interest
0% AER
£100 cash-back when you switch using The Co-operative Bank switching service & pay in £800 a month (they'll also donate £25 to charity). T&Cs apply for the £100 offer. Visit providers website for full details.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 18.9% EAR (variable).
Yorkshire Bank Current Account Direct
Account Fee & Requirements
No monthly fee
pay in £1,000+ a month
Overdraft
9.9% EAR
(£10 buffer)
Headline Interest
2% AER
(£1 to £3,000)
£150 to switch your banking - once you've made a single payment of £1,000 or more, within 31 days of switching. Use the Current Account Switch Service to transfer your main bank account & close your old account. T&Cs apply.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 9.9% EAR (variable) + £6 per month.
Nationwide FlexDirect
Account Fee & Requirements
No monthly fee
pay in £1,000+ a month
Overdraft
12 month interest
& fee free + then £0.50/day
Headline Interest
5% AER
(£1 to £2,500)
Detailed switching service to personally manage your account opening. Main current account holders are able to access exclusive customer deals and benefits.
Interest rate applies when you're in credit, on the condition that you pay £1,000 per month into the account.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged £0.50 per day.
TSB Classic Account
Account Fee & Requirements
No monthly fee
Overdraft
£25 interest
& fee free, then 19.94% EAR
+ £6/month
Headline Interest
0% AER
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 19.94% EAR (variable) + £6 per month.
Nationwide FlexPlus
Account Fee & Requirements
£10 a month
Overdraft
£100 interest
& fee free + £0.50/day
Headline Interest
3% AER
(£1 to £2,500)
Packaged Account which includes free worldwide family travel insurance, family mobile phone insurance and UK and European Breakdown Cover as well as commission-free cash withdrawals abroad and a 3 month interest free overdraft.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged £0.50 per day.
First Direct 1st Account
Account Fee & Requirements
£10 a month
Overdraft
£250 interest
& fee free, then 15.9% EAR
Headline Interest
0% AER
With the 1st Account you will get £100 for switching and a £250 interest-free overdraft comes as standard. Plus £100 if you're not happy after 6 months & want to leave. Gain an additional £25 if you apply & use a first direct credit card. T&Cs apply.
Monthly charge is waived if £1,000+ is paid in per month.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 15.9% EAR (variable).
Halifax Reward Current Account
Account Fee & Requirements
No monthly fee
Overdraft
£1 - 3/day
(£50 buffer)
Headline Interest
0% AER
Up to £185 reward in year 1 made up of £5/month when you pay in £750, pay 2 different direct debits & stay in credit, & £125 for switching. Start your switch by 5th April to get £125 when you use the Current Account Switch Service & close your old account
If you've had £100 for switching since January 2012, we're sorry but you don't qualify. T&Cs apply.
Representative Example: If you use a planned overdraft of £1,200, then you will be charged a daily fee of £1. Overdrafts are subject to status.
Barclays Bank Account
Account Fee & Requirements
No monthly fee
Overdraft
none
Headline Interest
0% AER
A straightforward bank account with a contactless debit card. Visit the Features Store to tailor your account with the features and benefits that fit the way you want to bank.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged £1.50 per day.
The Co-operative Bank Current Account Plus
Account Fee & Requirements
No monthly fee
pay in £800+ a month
Overdraft
none
Headline Interest
0% AER
£100 cashback when you switch using The Co-operative Bank switching service and pay in £800 a month (they'll also donate £25 to charity). T&C's apply for the £100 offer. Visit providers website for full detials.
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged 18.9% EAR (variable).
Cashplus Cashplus Deluxe Account
Account Fee & Requirements
£9.95 a month
Overdraft
-
Headline Interest
0% AER
100% instant approval. No hidden or penalty charges. Add Creditbuilder to improve your credit rating
Ffrees Family Account
Account Fee & Requirements
No monthly fee
Overdraft
-
Headline Interest
0% AER
Have your wages, pension or benefits paid in for free. Includes 'cashback' style rewards with thousands of well known retailers.
No monthly fee, however, £2 a month If you do not use your Ffrees Account for two consecutive months.
Santander Everyday Current Account
Account Fee & Requirements
No monthly fee
Overdraft
£1.00/day
(£12 buffer)
Headline Interest
0% AER
Representative Example: 0% EAR (variable) Arranged Overdraft. No Daily Arranged Overdraft Fee for the first four months. Then £1 per day capped at 20 days each monthly statement period applies thereafter. Assumed Arranged Overdraft credit limit: £1,200. Actual amount may differ.
Santander 123 Current Account
Account Fee & Requirements
£2 a month
pay in £500+ a month
Overdraft
£1.00/day
(£12 buffer)
Headline Interest
3% AER
(£3,000 to £20,000)
Cashback and interest paid every month, every year. Independently rated 5 star by Defaqto and Best UK Bank by Euromoney
Representative Example: If you use an arranged overdraft of £1,200 you'll be charged £1.00 per day.
Ffrees Plus Account
Account Fee & Requirements
£2.50 a month
Overdraft
-
Headline Interest
0% AER

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Which Bank Pays the Best Interest Rates on Current Accounts

by DaisyLill

With the Bank of England base rate stuck at a record low, finding a decent rate of interest for your savings can be an uphill struggle.

business meeting with laptop

However, when it comes to getting the best interest rates on current accounts, it can be an even more tortuous search. But despite what it may feel like, there are a number of providers who still offer current accounts that pay interest.

We take a look at the best current account bank interest rates and what to look for to get a great deal.

Can I really get interest paid on my current account?

Although it might be surprising, current account interest rates compare very favourably to other types of account, including savings. Not every current account offers interest payments on credit balances but of those that do, many are very generous in comparison.

The highest interest rate on a current account may have conditions attached such as being able to pay in a minimum sum every month and paying out at least one or two direct debits. This type of qualifying criteria is typical for the best bank interest rates on current accounts but on the flip side, there's often an incentive offered too for switching from your existing provider.

The average interest rate on a current account varies hugely with most providers offering very little. However, if you compare your options and shop around it's certainly possible to get a good deal.

How to work out current account interest rates

Knowing how to get the best rate of interest on a current account isn't that much use if you don't actually understand what the figures mean. And with financial jargon often harder to understand than a foreign language, it can be almost impossible to work out how much interest you will actually receive.

For most bank accounts interest is normally paid on cleared balances only; credits which are waiting to be processed won't count towards an interest payment. Many banks calculate this at the end of each working day and will deduct income tax from the gross figure.

Therefore, if you want to know how much interest you will be paid, you just need to know the rate paid by your bank. Take the interest rate (5% for example) then divide this figure by 365; this will give you the daily interest rate. Multiply this figure by your cleared balance at the end of the day and the figure will show you how much interest you earned on that one day. Repeat the process for all the days you want to calculate interest for. Don't forget to deduct tax from this figure unless you receive your interest payments gross.

Once you know how to calculate the interest payable, you have more scope to compare current account interest rates as you will be able to determine the difference that varying rates will have on your balance.

What to look for when carrying out a best current account interest rate comparison

The bank account with the highest interest rate will of course be the one you are immediately drawn to but it's worth checking the fine print to see if the deal is quite as competitive as you think.

The best interest rate accounts not only typically have qualifying criteria, they also frequently carry penalties if you fail to meet them one month. This can wipe out any interest you earn so if you do sign up, make sure you set yourself reminders to check. And many of the accounts may also be fee-based so remember to factor this into your calculations when you compare bank account interest rates.

Other considerations include checking what balance the highest rate of interest applies to; you may find that once you have accumulated a certain amount, interest payments dwindle to as low as 0.1%. Likewise, the headline interest rate may only be payable for an introductory period; check to see what it reverts to once this has passed as it may not be worth making the switch.

It's also worth considering other priorities as well as the online bank account rate of interest. For instance whether there is a banking app, if there's a branch near you and, if you go into your overdraft on the odd occasion, whether the rates are favourable. Ultimately a high rate of interest on an overdraft could cost you more than you'd earn in interest so make sure you check this just in case!