This week's best current accounts

Interest rates on savings accounts are so low that more people are turning to their current accounts to grow their cash.

If you keep your balance in credit they can deliver healthy returns, but can prove expensive if you dip into the red, so if you frequently have a low balance it’s better to opt for an account that offers cheaper agreed overdraft borrowing.

Many others offer attractive up-front offers to tempt you into switching.

There’s normally a couple hoops to jump through, but if it’s very easy to do through the Current Account Switching Service, and returns can be lucrative.

Millions of people have switched their current account since the service was launched in 2013. Each week Moneywise will be bringing you the best of what the current account market has to offer.

Find the best current account for you

Best high interest current accounts

Nationwide’s FlexDirect 
5% interest on balances up to £2,500

The 5% interest rate is an introductory 12 month offer - when it ends the rate drops to just 1%. Agreed overdrafts are free for the first year but you’ll need to pay in at least £1,000 a month. 

Tesco Bank 
3% interest on balances up to £3,000

The supermarket giant pays 3% interest on balances up to £3,000 and has guaranteed to maintain this rate of interest until 1 April 2019. It also rewards debit card spending with Clubcard points. You currently earn one point for every £4 spent in Tesco but from 1 April 2017 this will rise to one points per £1 spent. You also get one point for every £8 spent elsewhere. Due to high demand, Tesco has closed this account for new applications until further notice.

Bank of Scotland Vantage 
3% interest on balances between £3,000 and £5,000

Holders must pay £1,000 into the account each month and pay out at least two direct debits. To access this interest rate you must open a standard current account with the bank and request its Vantage add-on.

Santander 123 Current Account
1.5% interest on balances up to £20,000

This account comes with a £5 monthly fee, but also very generous cashback on household and utility bills.

TSB Classic Plus 
3% interest on balances up to £1,500

You’ll need to pay in at least £500 a month, register for internet banking, opt in for online bank statements and paperless correspondence to get this headline rate.

Best current account switching bonus

HSBC Advance Account
£150 to switch, £50 extra if you stay for a year

HSBC is offering £150 to new customers who switch to this or a Premier Account. Customers will receive a further £50 after 12 months if their account is still open.

Co-operative Bank Current Account
£110 to switch

The Co-op offers a £110 bonus when you move using the switching service and. This account also offers up to £5.50 a month in cashback but you must have four active direct debits each month.

First Direct's 1st Account
£100 to switch, £100 if you leave within six months

First Direct will pay you £100 cash if you switch to one of its current accounts. It will also pay you another £100 if you are unhappy with the service and leave after the first six months. To qualify, you’ll need to transfer via the Current Account Switching service and deposit at least £1,000 in the first three months.

M&S Bank Current Account
£50 M&S gift voucher to switch, plus £5 a month for two years

Marks and Spencer give a £50 voucher to new current account customers, plus a £5 voucher each month for two years, providing you pay in at least £1,000 a month and have two direct debits set up. The deal is also available on M&S’s £10 a month Premium Account.

Halifax Reward Current Account
£100 to switch

Halifax will pay £100 to anyone who switches to its current account a £100 bonus. The same reward is also available on its Ultimate Reward Account. That charges a £10 monthly fee, or £15 if you pay in less than £750 per month. The Halifax switching bonus will drop to £75 from Wednesday 1 March. 

TSB Classic Plus account
£125 to switch, but only through MoneySupermarket

The TSB Classic Plus account offers switchers a £125 bonus, but this is only available through the price comparison site MoneySupermarket.

Best authorised overdrafts

First Direct 1st Account 
£250 interest free overdraft 

A healthy interest-free overdraft but anything above this is charged at 15.9% rate.

M&S Bank’s Current Account 
£100 interest free overdraft

This account has an £100 interest-free overdraft. Go further into the red and you’ll be charged at 15.9%.

Best for customer service

Picking the right bank isn’t just about getting the highest interest rate, or lowest overdraft fees. Service is equally important. That’s why the Moneywise Customer Service Awards look at the companies readers trust the most each year.

The 2016 Awards, which consider the views of 24,000 readers, show that Metro Bank is the most trusted current account provider in the UK. Readers scored it 4.9/5 for trust, narrowly beating First Direct, which has also consistently scored well over the years.

Nationwide, TSB and Santander complete the top five in that order, with customers swayed by high interest deals.

More about

Your Comments

I've been with Santander since they took over A&L and only stay because of the interest I get from my 123 account. The customer service I've had is not good.

I've looked high and low but have been unable to find the...and there’s a linked regular savings account paying 5% too...with TSB.

Hi Andy, sorry but I don't follow. Please could you drop me a note to editorial@moneywise.co.uk?

Well you say in the following paragraph that TSB has a linked regular savings account paying 5%.
Alternatively, the TSB Classic Plus account will pay 5% interest on balances up to £2,000, but the rate is going to be slashed in the new year. You’ll need to pay in at least £500 a month, register for internet banking, opt for bank statements and paperless correspondence to get the bonus rate, and there’s a linked regular savings account paying 5% too. It's still worth considering for the other perks. 
I've been unable to find details of this regular saver with TSB paying 5%.

Right. Thanks for bringing this to my attention. TSB now offers a credit card paying up to £5 per month instead of the preferential savings account. I've corrected the article. Sorry for this, I've taken it up with our data supplier.