Interest rates have been increasing recently and while you should not expect to make big bucks (we're talking the equivalent of three or four free dinners a year), but if you can get one, it's definitely worth it. The higher the rate the better, but there are a few extra tricks to compare them and make sure you get the best deal. We've gathered them for you.
Compare current accounts with high interest
Table: sorted by interest rate (AER) and account fee.
You might not have thought about earning interest on your current account balance, but newcomer Kroo has one of the most competitive in-credit interest rates on the market. It matches some of the top easy access savings accounts, but is available on your current account balance up to £85,000. A fully-licensed UK bank, Kroo offers a current account that's free to open, comes with an overdraft subject to availability and has all the useful budgeting features you'd expect from a digital bank including a shared expenses tracker and real-time transaction information.
This account from Virgin Money offers a host of benefits without the monthly fee. Account holders can earn a competitive rate of interest on balances up to £1,000, plus take advantage of an exclusive linked savings account if they want to squirrel away any spare cash. On top of this, users will also be able to benefit from fee-free foreign transactions and cash withdrawals if they use their debit card abroad. The account also offers an arranged overdraft and can easily be managed online or via the app. The app can help users track their transactions and get better at budgeting. To qualify for the account you’ll need to be at least 18 years old and have a good credit score.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 19.9% EAR variable.
Pros
No monthly fee
Pays interest on in-credit balances
Fee-free foreign transactions
Easy to apply for and manage account online or via the ap
£175 cashback for accounts switched using the Current Account Switch Service, including at least 2 direct debits.
Nationwide’s FlexDirect account is a good option whether you’re someone who stays in credit or someone who tends to dip into the red. For those who usually hold a balance in their account, the FlexDirect account pays a competitive fixed rate of interest for the first 12 months on balances up to a set amount. Interest is still paid after this but at a lower rate. Alternatively, if you tend to rely on your overdraft, the account offers an interest-free arranged overdraft for the first 12 months. There is no monthly fee for maintaining the account which can be managed online. To open an account, you’ll need to be aged 18 years or over and a UK resident.
Pros
Pays interest on in-credit balances
Interest-free overdraft for the first 12 months
No monthly fee
Account can easily be opened online
Cons
Interest rate drops after the first 12 months
Interest is charged on overdrafts after the first 12 months
Covers account holder, partner and up to 4 dependent children aged under 18.
In return for a monthly account maintenance fee, the Virgin Money Club M account offers a range of benefits. These include interest paid on credit balances and an exclusive linked savings account. Account holders can also enjoy worldwide family multi-trip travel insurance, including their own concierge service and 24-hour medical advice. Plus, the account's contactless debit card does not charge fees for foreign spending or making cash withdrawals in the UK or abroad. A range of gadgets, including mobile phones, laptops and cameras will also be insured worldwide and you’ll have UK breakdown cover for your car. You’ll also be able to arrange an overdraft and you can apply for the account online or over the phone as long as you’re aged 18 or over. In addition, the Virgin Money app can help you set up budgets, top up your savings and sort out your spending.
Representative example: If you use an arranged overdraft of £1,200, you'll be charged interest at 19.9% EAR variable. Account fee of £12.5 per month.
Pros
Range of insurance policies included with the account
As you may have guessed from the name, high interest current accounts are standard current accounts that pay an interest rate on your account balance, usually up to a certain limit.
The interest rate can be quite juicy, at least if you compare it to easy access savings accounts, but the balance limit on which it’s paid is generally low, so don’t get your hopes too high. You may also have to meet certain conditions (for example pay a certain sum into the account every month) to get the best rate.
The interest will usually be paid monthly directly into your current account.
How to compare high interest current accounts
The higher the interest, the better, right? Well, yes, but that’s not the only aspect you should take into account when comparing deals:
Interest rate. Top-paying accounts may reach a 5% annual rate. Sometimes. If you’re lucky.
Eligibility criteria. You’ll usually need to pay a minimum amount into the account every month to get the advertised rate. With some premium accounts, this limit is fairly high and may be more than your monthly salary, in which case you should probably look for an alternative.
Balance limit up to which the top rate is paid. A great interest rate often comes with a low limit. If you don’t have much in savings, it’s a great solution. Otherwise, you may want to see if you can get more from a competitor that pays a lower late but on a higher balance. However, don’t forget to take into account how much that extra balance could be worth in interest if kept in a separate savings account.
Time limit. Top rates are often just introductory offers that last a year or so. What will happen when the deal is over?
How much you can earn in a year. That’s the raw figure you should ultimately be looking at. It allows you to figure out which account is best, not in general, but for your particular situation.
You should also spare a thought for the features you may be giving up in return for a higher interest rate. How’s the customer service of the bank you’re considering? Is the app slick? Can you get an overdraft or a credit card if you need them? Also, in the worst case scenario, is it really worth putting up with a terrible banking experience for £100 in interest a year?
Case study: Jason chose Kroo because of its interest rate
"I chose Kroo because it pays a decent interest rate and it’s a current account, so I don’t have to move money around accounts to use it.
If there’s one thing you’d tell a friend who’s thinking of getting this, what would it be?
It was pretty easy to apply and I’ve had no problems with it since."
High interest current accounts vs savings accounts
Why choose when you can have both? Most savers will be better off by opening both a high interest current account and a savings account on top. It all comes down to how much you have saved and are planning to save in the near future. You should follow these steps:
Fill your high interest current account first. Up to the limit. Easy access current accounts pay a lower rate, so they should come second.
Compare savings accounts and open one. Choose the best type of savings account for your circumstances. For example, can you afford to lock away part of your savings for a while? Fixed bonds offer better rates than easy access savings accounts.
Regularly move money from your current account to your savings account. Once you’ve reached the maximum balance of your high interest current account, you should move any extra money you want to save to your savings account (or you won’t earn interest on it).
What is a linked saver?
Banks and building societies like to reward loyalty. One of the ways they do that is by offering exclusive interest rates to their current account customers.
A linked savings account is one that is only available to customers with a corresponding current account. You’ll find linked savers tend to be regular saver accounts or instant access savings accounts and offer higher interest rates than other savings rates on the market.
It’s important that your current account suits your needs, but it is also worth checking if you can get a high interest rate on your savings by opening a linked saver.
High interest offers
Below we have listed a number of accounts that come with an interest rate or offer exclusive access to a linked savings account. This list is checked regularly and was last updated on 13 November 2024.
first direct – 1st account – Access to a 7.00% AER/gross interest Regular Saver Account
NatWest – Digital Regular Saver – Access to 6.17% AER/6.00% gross on balances up to £5,000 with a Digital Regular Saver account
HSBC – Advance Bank Account – Access to a 5.00% AER/gross HSBC regular saver account
Lloyds – Club Lloyds Monthly Saver – Access to a 6.25% AER/gross fixed interest monthly saver account
Nationwide – FlexDirect Account – Access to a 6.50% AER/gross regular savings account
Santander – Edge – Access to a 6.00% AER/5.84% gross (variable) interest savings account on balances up to £4,000. This includes a 1.50% AER/1.49% gross (variable)/ bonus rate for the first 12 months from opening
Chase – Current Account – Access to a 3.50% AER/3.45% gross variable interest Chase saver account
Virgin Money – M Plus Account – Access to 2.5% AER/2.48% gross on balances up to £25,000 with a linked M Plus Saver account
As we said, if you’re looking for an easy access savings account that pays a similar interest rate, you’re probably out of luck. However, you could consider:
Regular savings accounts. These are the only types of savings accounts that can compete with high interest current accounts when it comes to interest rates. They usually allow you to set aside a certain sum each month for a year. The main advantage is that your savings are kept in a separate account, so you’re not tempted to spend them. However, you usually can’t access your money until the product expires.
Current accounts that offer a switching incentive. When you do the maths, most high interest current accounts won’t allow you to earn more than £100 a year in interest. There are comparable switching incentives available out there, so it’s definitely an option to consider.
Be careful when comparing the interest rate and the balance limit of a regular savings account with those of a high interest current account. With the current account, you can fill the account to the limit from the very start and earn the maximum interest possible. With the regular savings account, you can only add money to it monthly instead. So even if the two accounts offer the same rate and the same limit, the current account will actually allow you to earn more.
Pros and cons
Pros
You always have access to your money.
You can find fairly high interest rates, especially compared to easy access savings accounts.
Great if you only have a small sum in savings, it will allow you to make the most of it.
Cons
You only get interest up to a certain balance limit.
You usually need to pay a certain sum into the account every month.
Savings aren’t kept separate from your day-to-day spending, so budgeting and saving can become more difficult.
High-interest rate current accounts can be a great way to boost your income, without having to do anything. They’re a way of earning a passive income but while the interest rates are attractive, there’s usually a limit they pay up to and restrictions such as depositing a certain amount. Putting the money into a savings account will usually pay more interest – especially an ISA which is tax free – and remember to always keep a little cash aside for emergencies. That could be a broken washing machine, car, or in the worst-case scenario a loss of income.”
Bottom line
Finding a current account that pays a juicy interest rate on in-credit balances ain’t as easy as it used to be. They’re elusive, but they do still exist, and usually pay a better rate than the leading easy access savings accounts. However, even the best high interest current accounts on the market today won’t be making you a great deal of cash.
Another thing to bear in mind is that these accounts usually limit the monthly amount on which they are willing to pay interest, and usually need to you pay in a certain amount each month in order to unlock the interest payment. A third factor to bear in mind is that in many cases the high interest rate is temporary, designed mainly to attract new customers.
If you’re only saving a little each month, but want to earn some interest, then a high interest current account can be a good choice. If you’re willing and able to put aside larger amounts each month, then you may be better off with a regular savings account.
Regular savers are the only types of savings account that match high interest current accounts when it comes to interest rates. They usually allow you to set aside a certain sum each month for a year. The only difference with these accounts, as compared to keeping your cash in the high interest current account is that your savings are kept in separate account, so you’re not tempted to spend them.
But these accounts come with restrictions as well. You usually won’t be able to access that money until the account reaches maturity, a bit like a fixed bond savings account.
Frequently asked questions
Theoretically, yes. However, for some of us, it can be hard to meet the required criteria more than once.
Sure thing. It’s not really a balance limit; the rest of your balance after that limit simply won’t accrue any interest.
Nationwide used to offer that, but it doesn’t anymore. To access a regular savings account offer, you usually have to hold your main current account with the same bank (and that account normally doesn’t pay any interest).
Banking scores
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Finder scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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To make sure you get accurate and helpful information, this guide has been reviewed by Rebecca Goodman, a member of Finder's Editorial Review Board.
Valentina Cipriani was a writer at Finder UK. She wrote news, features and guides about banking and credit cards, helping people to improve their financial lives. She holds an MA in International Journalism. See full bio
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