5 of the Best High Interest Current Accounts

It has never been easier to switch current accounts, yet many of us are still making do with low-paying accounts that do not necessarily represent good value.

However, if you take the time to shop around, you could find that you are entitled to hundreds of pounds per year in interest. And in some cases, these current accounts will actually pay more than the average savings account.

Read on for our guide to the top five high interest current accounts that you can open right now.

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1. Nationwide FlexDirect

  • Interest rate: five per cent AER.

If you like to keep a financial cushion in your current account, Nationwide’s FlexDirect may be your best choice. If you deposit £2,500 when you open the account, you will be entitled to five per cent AER for the first 12 months – a better rate than most savings accounts.

However, in year two, this rate drops to just one per cent, although FlexDirect customers can still access Nationwide’s five per cent regular savings account.

Website: Nationwide Flexdirect

2. Tesco Bank Current Account

  • Interest rate: three per cent AER

Tesco’s current account guarantees a minimum of three per cent AER on balances up to £3,000 until 1 April 2019, and each customer is entitled to open two accounts.

The only conditions are that you have to pay in at least £750 per month, and you need to add at least three monthly direct debits to each account.

Furthermore, all Tesco Bank Current Account holders can double their Clubcard points, just by using their debit card or the weekly shop.

According to the latest ONS figures, the average UK household spends £53.30 per week on food and non-alcoholic drinks, which is equal to 53 Clubcard points per week (worth £0.53), or 2,765 points per year (worth £27.65).

By using a Tesco debit card, you can turn this into 5,530 points per year, or £55.30 in free groceries.

Website: Tesco

3. TSB Classic Plus

  • Interest rate: three per cent AER.

TSB offers one of the best rates on the market, with three per cent paid on all balances up to the value of £1,500.

Even better – if you set up two monthly direct debits, you will be entitled to £5 cashback, and if you use your debit card at least 20 times per month, you’ll get another £5.

To access these rewards, simply pay in a minimum of £500 per month, register for internet banking, and log into your online account at least once a year.

For a limited time, you can also get £75 if you refer a friend to the account, or if a friend refers you.

Website: TSB

4. Bank of Scotland Classic Account

  • Interest rate: two per cent AER.

Bank of Scotland’s Classic Account holders are entitled to two per cent AER on balances between £1 and £5,000 and each customer can open three accounts at once.

However, to benefit from this rate, you need to be able to pay at least £1,000 into your account every month, stay in credit, and pay at least two direct debits. If you don’t meet all of these requirements, you won’t get any interest.

Website: Bank of Scotland

5. Club Lloyds

  • Interest rate: two per cent AER.

Club Lloyds members get two per cent AER on all balances between £1 and £1,500, as well as a choice of yearly benefits which include six cinema tickets, an annual magazine subscription, or Gourmet Society membership.

Furthermore, account holders can claim up to 15 per cent cashback from a range of retailers such as Just Eat, Superdrug, and Morrisons.

Website: Club Lloyds

Comparison of High Interest Current Accounts

BankAccount NameBalance Interest is PaidInterest RatePotential Interest at best rate
NationwideFlexDirectUp to £2,5005% (Drops to 1% after 12 months)£125
Bank of ScotlandClassic AccountUp to £5,0002%£100
Tesco BankCurrent AccountUp to £3,0003%£90
TSBClassic PlusUp to £1,5003% £45 (Cashback bonuses up to £10)
LloydsClub LloydsUp to £1,5002%£30

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.