14 December 2017 : 


 

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High Interest Bank Accounts

As Savings and ISA Account rates have dwindled, a number of Banks have started to offer better interest rates on in-credit account balances to attract new current account customers (to whom they then try to sell other banking products and services). Some of these rates are now on a par with Savings accounts, and given that there tend to be fewer restrictions on withdrawing funds with bank accounts, these are fast becoming very attractive. Compare the best high interest current account products here and get a great interest rate on your balance.



Interest
AER
Set-up
Fee
Monthly
Fee
Min. Monthly
Funding
Overdraft
Rate

   


TSB Classic Plus Logo


Switch Guarantee Logo
3%
AER
£0
set-up fee
£0
per month
£500
per month
19.84%
EAR (variable)
  TSB Classic Plus
FSCS Logo
  • 3% AER interest on balances up to £1,500. Must pay in £500 a month, register for internet banking and paperless statements and correspondence
  • Up to £10 cashback every month (£5 cashback every month just for regularly spending with your debit card (minimum of 20 debit card payments) and £5 cashback every month just for paying two direct debits). Offer is valid from 1st March 2017, ends 30th June 2018 (T&Cs apply)
  • If you have a Plus account, earn up to £5 a month cashback with our selected TSB credit cards. Representative 18.9% APR (variable). T&Cs apply. Ends June 2018.
  • ApplePay enabled payments
     TSB Classic Plus - Full Product Details

  Representative Example: If you use an overdraft limit of £1,200 the interest rate charged will be 19.84% EAR (Variable)  
 




Nationwide FlexPlus Logo


Switch Guarantee Logo
3%
AER
£0
set-up fee
£13
per month
£0
per month
0.50p
per day
  Nationwide FlexPlus
FSCS Logo
  • Earn 3.00% AER in-credit interest for balances up to £2,500
  • Worldwide family mobile phone insurance
  • Commission-free cash withdrawals when abroad
  • ApplePay enabled payments
     Nationwide FlexPlus - Full Product Details

  Representative Example: If you use an arranged overdraft of £1,200 the amount we will charge you is 50p per day (variable)   
 




Santander 123 Mini Current Account Logo
3%
AER
£0
set-up fee
£0
per month
£0
per month
n/a
 
  Santander 123 Mini Current Account
FSCS Logo
  • 3% AER/2.96% gross (variable) on balances from £300 up to £2,000
  • Ideal for 11 to 18 year olds taking their first steps towards financial responsibility
  • 24/7 access to your account via Online, Mobile and Telephone Banking
  • Account holders must be aged between 11 and 18 years old
     Santander 123 Mini Current Account - Full Product Details

  Representative Example: Credit only available to individuals aged 18 or over  
 




Santander 123 Current Account  Logo


Switch Guarantee Logo
1.5%
AER
£0
set-up fee
£5
per month
£500
per month
£1
per day
  Santander 123 Current Account
FSCS Logo
  • 1% cashback on water and council tax bills and the first £1,000 you pay towards your Santander monthly residential mortgage payment
  • 2% cashback on gas and electricity bills and Santander home insurance premiums (policies administered and underwritten by Aviva Insurance Limited)
  • 3% cashback on mobile, home phone, broadband and paid-for TV packages
  • Monthly interest of 1.50% AER/1.49% gross (variable) payable on your entire balance up to £20,000
  • £5 monthly account fee
     Santander 123 Current Account - Full Product Details

  Representative Example: 0% EAR (variable) Arranged Overdraft. Arranged Overdraft Usage Fee of £1 per day. If you are switching to Santander then there will be no Arranged Overdraft Usage Fee for the first 4 months. Assumed Arranged Overdraft credit limit: £1,200. Actual credit limit may differ. Arranged Overdraft Usage Fee depends on the amount of overdraft you are using   
 


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What are high interest current accounts?

High interest current accounts do not differ in many respects to standard current account products, but they all offer higher interest rates on in-credit balances. A number of these types of bank account are available and, if you remain in credit on your account and avoid going overdrawn, they may well be of benefit to you.

Is a high interest account right for you?

If you are to benefit from this type of account, you must remain in the black on your account, and retain an optimal balance at all times (interest tends to only become applicable with a minimum balance, and then it tends to be capped beyond certain balances). If you can manage this, you may find that the interest rate you receive is actually higher than that of many savings accounts. However, it is worth bearing in mind that some accounts may require a minimum monthly deposit in order to obtain these rates. It is important therefore to check that you can comfortably put this amount in to the account every month before you apply. Failing to adhere to the minimum requirements associated with your particular account may lead to you losing your rewards, or even face a financial penalty. These penalties will vary from provider to provider, and may not take effect immediately if you only default on one month but it is always best to read the small print before you apply so that you are aware.

Do high interest accounts have drawbacks?

You should be very clear when selecting this type account that the interest rate that you are offered is not just an introductory offer that will expire in a short length of time, usually after a 12 month period. If you currently have a high interest current account and are looking to switch in order to receive a higher rate, then you should ensure that the rate remains at an increased rate after the expiration of any introductory (new customer) period.

Some banks and building societies have been accused of exploiting the fact that few people change their current accounts to lure new customers with impressive rates, which they subsequently reduce after a given time.

What you need to be aware of.

If you do find yourself making use of an overdraft facility every so often, then this type of account may not necessarily be the best one for you. However, some providers do offer the benefit of low interest (or in some cases interest free) facilities alongside a great interest rate. Coupled with the incentive of a switch-guarantee within a convenient time frame, it may be of real benefit to you financially to change providers.

It really pays to use the comparison table above to ensure you get the best account for your needs and financial circumstances.

If you are happy enough to lock your money away in an account which does not offer easy access, and therefore the temptation to dip into your savings, a fixed term savings account might be better suited to you.

Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.

Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.
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