Looking for a better bank? This is Money's five of the best current accounts
- We pick the best current accounts to switch to for interest and free cash
- ?Our top current accounts also include great customer service
- ?Best current accounts can offer savings account-beating interest?
How hard does your bank account work for you? Hard enough to give you cashback on your household bills, interest on your balance or simply standout customer service?
Although it is only natural to have reservations over switching from a well-worn account that has seen you through your financial life - possibly since you were a teenager - this is no reason to stay put if you could be getting a better deal elsewhere.?
Here we look at some of the best options available to help you to make your money work harder, cut down on fees, or get free stuff.?
This is not an exhaustive list of all current accounts around, but as with our?Five of the best Cash Isas round-up, we have chosen accounts that we feel stand out for some reason.
Find a more rewarding deal: Some accounts promise cashback, interest and freebies
|Santander 123 ||Santander will pay 1.5 per cent on balances up to ￡20,000 plus up to 3 per cent cashback on bills ||￡5 a month fee. You must pay in ￡500 a month and two active direct debits |
|Santander 123 Lite?||Up to 3 per cent cashback on your household bills?||￡1 a month fee, ?￡500 a month and two active direct debits|
|First Direct 1st Account?? ||￡125 (until December 11) ?for joining via MoneySupermarket and ￡250 interest-free overdraft ||Pay in ￡1,000 a month or maintain a ￡1,000 balance |
|Nationwide FlexDirect ||5 per cent interest on up to ￡2,500 and fee-free overdraft, both for the first year only||Pay in ￡1,000 a month |
|Halifax Reward ||￡75 for joining via switch service ?and a ￡3 monthly bonus ||Pay in ￡750 a month, stay in credit and two active direct debits.|
|Tesco Bank Current Account? ||3 per cent on balances up to ￡3,000 (guaranteed until 2019) and extra Clubcard points for spending on debit card||￡750 monthly deposit and 3 direct debits |
|TSB Classic Plus?||3 per cent on up to ￡1,500 plus up to ￡10 cashback each month until June 2018||Pay in ￡500 a month.?You must maintain two direct debits, register for internet banking, paperless statements and paperless correspondence.?|
|M&S Bank Current Account ||￡125 gift card for joining via switch service, plus collect an extra ￡5 a month for the first year in vouchers. Loyalty points for spending on debit card in store and ￡100 interest-free overdraft ||No fee or rules |
|Metro Bank Current Account? ||Free debit card transactions in Europe and longer opening hours ||No fee or rules |
|Club Lloyds?||Pays 2 per cent on up to ￡5,000, plus a choice of one lifestyle benefit such as six cinema tickets or magazine subscription?||￡3 monthly fee or deposit ￡1,500 a month?|
|Classic Account with Vantage?||2 per cent interest on up to ￡5,000||Remain in credit, two active direct debits, and pay in ￡1,000 a month. Branches in Scotland only, but Halifax branches support most day-to-day banking needs.?|
|Co operative Bank with Everyday Rewards?||Up to ￡5.50 in monthly rewards including 5p (up to ￡1.50) each time you use your debit card||Switch accounts using the Current Account Switch Service and maintain 4 direct debits, pay in ￡800 a month, stay in credit and receive paperless statements|
|Natwest Reward Account?||2 per cent back on your household bills?||Comes with ￡2 monthly fee and ￡1,500 minimum monthly deposit.|
Account for...customer service (and free money) First Direct
First Direct is lording it over other account providers in the popularity?stakes and has the trophies to show for it - thanks to a growing collection of customer service awards.
Not only that, First Direct will currently give you ￡125 to switch.
To get the cash you must sign up through Money Supermarket before December 11, after that it drops to ￡100.
Not only that, if you wish to switch to another bank after six months, but before you have been a customer for 12 months, it will give you another ￡100 and help you to move.?
Another bonus is the ￡250 interest-free overdraft. After that, interest is charged at 15.9 per cent - still a fairly competitive rate - up to your agreed formal overdraft limit.
It has also recently added a cashback perk for swiping your Visa debit or credit card with certain retailers. This is a nice bonus but wont be worth switching for however.?
You will need to credit the account with ￡1,000 in the first three months to be eligible for the ￡100 sweetener, and you will need to keep that up each month if you want to avoid the ￡10 monthly account fee.???
This is Money verdict
First Direct boasts many satisfied customers and it will give you money to join and money to leave if you don't like it. However, it doesn't have any branches so if you are the sort of person who likes to do their banking face-to-face, this account may not be for you - although you will be able to use HSBC or Post Office counter services.
Also, if your balance is always firmly in credit, it may be a better option in the longer-term to find an interest-paying current account.
Shop around to see how interest rates compare with the ￡100 bonus.
Interest: Rates on specialist accounts beat most savings accounts
There are a few banks offering in-credit interest which you can read about in our separate incredit interest account guide here.
Some offers come without a time limit or interest on larger balances so which deal is best for you will depend on individual circumstances, but Nationwide is offering the highest available interest rate on a current account.
Best interest rate
Nationwide's FlexDirect account pays out 5 per cent on balances up to ￡2,500 for the first year - not bad considering most easy-access savings rates have slid in recent years.
Accountholders are also eligible for a 0 per cent overdraft for the first 12 months, and reduced fees of 50p per day for arranged overdrafts after that.
You must pay in a minimum monthly income of ￡1,000. On the last day of every month Nationwide will calculate the interest you've earned each day and then pay you this interest on the first day of the next month.?
If your income drops and you can't pay in ￡1,000, you won't receive any interest that month.
The 5 per cent interest deal ends after a year, when it drops to just 1 per?cent. So it may be worth looking elsewhere after the 12 months for a better return on your money.
You get an interest-free arranged overdraft for that 12 months, but after that a flat rate charge of 50p per day applies, this will be costly for those who regularly go overdrawn compared to a typical interest-charging overdraft.
Unarranged overdrafts cost 50p per day for balances under ￡10 and ￡5 per day after that, capped at ￡60 per month.
If?you like to carry out your banking face-to-face, this account might not?be good for you because you can only access internet or telephone services as a FlexDirect customer.
This is Money verdict
Accounts that are good for both in-credit and overdrawn customers are few and far between so this could be a good bet for those who have smaller balances - but can afford to pay in ￡1,000 each month.
Existing customers can boost their earnings by recommending Nationwide current accounts to their friends. For every person that switches on your recommendation you will both be rewarded with ￡100 in your account.?
Savings boost: TSB pays 3 per cent on ￡1,500
TSB?- 3% on up to ￡1,500 and ￡10 monthly cashback?
TSB offers both cashback and interest on your balance at the moment, but the cashback perk is only temporary.??
You get ￡5-a-month for maintaining two direct debits and an extra ￡5 for making 20 debit card payments each month?until?June 2018.?
Accountholders earn 3 per cent interest on the first ￡1,500, worth up to ￡45.???
The account also has the major bonus of only needing a ￡500 monthly deposit, ￡1,000 less than the Lloyds Club account. ?
New customers are limited to one single and one joint account.?
You must maintain two direct debits, register for internet banking, paperless statements and paperless correspondence. The account requires a ￡500 minimum monthly deposit.
There are some hefty penalties for going overdrawn: Authorised and unauthorised overdrafts are subject to a monthly ￡6 fee while interest is charged at 19.94 per cent.
There is a free overdraft buffer, if you do stray into negative credit by accident, but this only protects customers from charges if they go overdrawn by ￡10.
It is possible to apply for a?￡25 interest and fee-free overdraft excluding the standard ￡10 buffer, this would allow you to go overdrawn by a slightly more generous ￡35 before being hit by interest or fees.
Unplanned borrowing comes with additional daily fees on top of the ￡6 monthly fee. It costs ￡5-a-day for amounts above the ￡10 buffer but below ￡25, anything above ￡25 incurs a ￡10-a-day charge.?
Santander: offers the best current account for cashback
Account for interest on a large balance...?Santander 123??
Interest on savings?and cashback on bills
The 123?account will pay an AER of 1.5 per cent on up to 20,000 - earning a maximum yearly income of around ￡302.
Previously accountholders would have earned up to ￡604 a year. However the 1.5 per cent rate is still high enough to beat the best easy access savings accounts.?
Interest is clocked up on a daily basis and will depend on what you have in your account that day.?
It also pays tiered cashback on household bills.
You get 1 per cent back on water, Santander mortgage and council tax payments, 2 per cent on Santander insurance policies and gas and electricity and 3 per cent on?mobile and home phone, broadband and TV packages.?
Both the interest and cashback you earn is paid directly back into your 123 account on a monthly basis.
The ￡60 annual cost will negate some of the benefits of its cashback and interest payments.?
To be eligible for cashback services you must set up a minimum of two direct debits and pay in at least ￡500 every month.
This account is really not for you if you often find yourself in the red. Arranged overdrafts are charged at ￡1 a day. Unarranged overdrafts shoot up to ￡6 a day with no cap on unauthorised borrowing.
Santander says that you will not be charged more than ￡95 in fees for any one month.?
This is Money verdict?
In reality the cut to the 123 account interest rate, combined with the monthly fee, means this is no longer the great deal it once was for many.
That said, for those with considerable savings, the 123 current account will remain a good deal despite the fee hike.
If there is any chance of you slipping into your overdraft, there is little point applying for the account as the combined charges and monthly fee are likely to cancel cash benefits.?
Santander says the average balance held in the account is ￡12,500, which equates to ￡126.25 profit - excluding cashback - even after fees have been taken in to account.
However those with a smaller balance may be best off switching to a free option.
TESCO BANK: GREAT FOR SHOPPERS
Tesco Bank's current account's popularity shot up overnight thanks to its pledge to freeze the 3 per cent in-credit interest rate, for two years.
On the maximum ￡3,000 balance savers could earn ￡88 a year.
It also offering a boosted Clubcard rate for current account holders until April 2019.
You will earn 1 point per ￡1 spent in stores on top of the standard loyalty scheme, meaning a total earning 2 points per ￡1 spent in stores.
In order to earn interest it does require a ￡750 monthly minimum deposit and three direct debits
You can read more about the account here?
Shopping rewards: M&S Bank gives switchers a ￡100 welcome voucher to spend in stores
Account for a cheap overdraft and ￡185 to switch and stay...M&S Bank??
New customers get ￡125 in M&S vouchers when they sign up plus a ￡5-a-month gift card top up for the first 12 months.?
On top of this you can earn an extra 5 per cent in interest if you make use of the attached regular saver account and deposit the maximum ￡250 each month.??
Fans of M&S can earn extra reward points for swiping their debit card in stores and have access to a simple and generous overdraft when opening the free?M&S Bank Current Account.
To get their hands on the giftcard, switchers must move their everyday banking to the account within six months of opening.
Shoppers ?also earn 1 M&S point per ￡1 spent in store and online.
500 M&S points are worth ￡5, so they may take a while to rack up, but can be used to buy most things in store. Points will be converted to vouchers and sent to customers four times a year automatically.
￡100 interest-free overdraft
If that wasn't enough, The account also comes with a decent automatic ￡500 overdraft. It comes with an interest-free buffer of ￡100.
There are no extra overdraft usage charges and flat rate 15.9 per cent interest applies to both authorised and unauthorised borrowing.
Another major perk for borrowers, the bank does not apply any extra usage fees for spending beyond the agreed limit, bounced payments and paid items unlike most other current accounts.
The extra cherry on top of the M&S account is customer access to a 5 per cent regular savings account deal. This allows you to put away between ￡25 and ￡250 a month for 12 months.
Watch out for
Interest beyond the first ￡100 of your overdraft costs 15.9 per cent, which although lower than most, will still mount up if you do not clear the debt.
When using your debit card abroad there is a non-sterling transaction fee of 2.75 per cent for purchases and withdrawals, however the bank does not apply an additional cash withdrawal fee, saving around 3 per cent compared to most of its competitors.?
THIS IS MONEY'S FIVE OF THE BEST CURRENT ACCOUNTS
TSB's Classic Plus account will pay you 3% interest on up to ￡1,500 and up to £10-a-month if you maintain two direct debits and make 20 debit card payments each month (until June 2018). You must pay in ￡500 a month.
First Direct regularly tops polls for customer service. Its First Account offers £125 for joining and has a £250 interest-free overdraft. It also now pays cashback for spending with certain retailers. You must pay in ￡1,000 or pay a ￡10 monthly fee.
Santander's 123 account pays 1.5% interest on balances up to £20,000 and also gives 1 to 3% cashback on bills. You need to pay a £5 a month fee, pay in £500 a month and have two active direct debits.
Nationwide pays 5% interest on the first ￡2,500 in your Flex Direct account for the first year. Plus you get a fee-free overdraft for 12 months. Requires a ￡1,000 per month deposit.
M&S Bank's current account has a £125 gift card for joining, plus you get an extra £5 a month top up for the year. It has a ￡100 fee-free overdraft and no miniumum deposit criteria.
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