01 March 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 few restrictions on withdrawing funds, these accounts are now very attractive. Compare the best high interest current account products here and get great interest on your balance.




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

   


Nationwide FlexPlus Logo


Switch Guarantee Logo
3%
AER
£0
set-up fee
£10
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 Logo
3%
AER
£0
set-up fee
£0
per month
£0
per month
n/a
 
  Santander 123 Mini
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 - Full Product Details

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




Santander 123 Account  Logo


Switch Guarantee Logo
1.5%
AER
£0
set-up fee
£5
per month
£500
per month
£1
per day
  Santander 123 Account
FSCS Logo
  • 1% Cashback on water, council tax and Santander mortgage payments (up to maximum monthly mortgage payments of £1,000)
  • 2% Cashback on gas and electricity bills*
  • 3% Cashback on mobile, home phone, broadband and paid-for TV packages
  • 1.50% AER/1.49% gross (variable) Interest on your entire balance up to £20,000
  • £5 monthly fee
     Santander 123 Account - Full Product Details

  Representative Example: A daily arranged overdraft fee of £1 per day capped at 20 days each monthly statement period applies. Assumed arranged overdraft credit limit: £1,200. Actual amount may differ   
 


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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 good 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.

Who offers high interest accounts?

High interest current accounts do not differ in many respects to standard current account products, but they all offer good 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?

The objective, if you are to receive the main benefit of this type of account, is to remain in the black on your account with an optimal balance at all times (interest tends to be capped beyond certain balances). If you do this, you may find that the interest rate you receive is actually higher than that of many savings accounts. However, some accounts may require a minimum monthly deposit amount in order to obtain these rates. It is important that check that you can comfortably put this amount in to the account every month before you apply for the account. Failing to adhere to the minimum requirements associated with your particular account may lead to you losing your rewards. These penalties will vary provider to provider; generally you’ll lose your ‘perks’ but may also suffer charges and even face a monthly fee for being an account holder. These may not take effect immediately if you only default on one month however, this will also be dependent on your provider and their terms.

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, this is 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 a low interest (or in some cases interest free) facilities alongside a great interest rate. Coupled with the incentive of a switch 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 financially circumstances.

Increasing the safety features in your home are always a good way to reduce the costs of insuring the property. Adding smoke alarms and fire extinguishers should help to reduce the cost of your policy. These are not only a decent way to keep down the cost, but are also a good idea generally to protect yourself and others in your home.

Alternatively, if you are happier 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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