Three top current accounts

Is your account paying a pathetic rate of interest? If the answer is 'yes', maybe it's time you switched.

It’s often said that your average Brit is more likely to get divorced than switch bank account. Many folk stay with the same bank for their whole adult life!

I can understand why people do that. Staying put is the simple approach. But there’s risk attached – you may end up getting a pathetic rate of interest on any balances in your current account or even no interest at all. You could also end up getting stung if you ever need an overdraft.

On the other hand, if you’re willing to put up with a bit of hassle, switching account could boost your wealth by as much £325!

So if you’re tempted to switch, let’s look at the UK’s top three current accounts.

Halifax Reward account

I like the Halifax Reward current account because it’s nice and simple. If you pay £1000 into your account each month, you get a £5 reward. You don’t have to calculate how much interest you’ll get, you’ll just get the £5. Nice and simple.

Even better, the £1000 sum doesn’t have to stay in your account for any period of time. Once it’s been paid in, you get the £5. If you get the reward every month, you’ll get £60 a year.

Some other banks offer you attractive introductory deals when you first open an account, but Halifax’s £5 reward feature should, all being well, remain on offer for years to come.

This is a great account if you’re confident that you’ll pay in at least £1000 a month and you’re always in credit. If your average current account balance through the month is £600, you’d need to be paid 10% annual interest to match the reward from Halifax.

That said, avoid this account if you’ll need a regular overdraft. The fees are high and could easily eat up your monthly reward and more.

Santander Preferred Current account

If you open up this account with Santander, you’ll get £100 in cash! You’ll also earn 5% interest on any balances up to £2,500 for the first year you have the account. The only conditions are that you must switch your direct debits and pay in at least £1000 a month.

Santander will also offer you an interest-free overdraft for 12 months. In addition, the bank will match your previous overdraft up to £5,000.

It’s great that the account works well whether you’re in credit or debt. As long as you’ve got an authorised overdraft, it’s not a disaster if you move into the red.

There are only two real downsides to this account. Firstly, the good stuff stops after the first year. So you’ll only receive 1% on your credit balances instead of 5%. And your overdraft will no longer be free.

Secondly, Santander has acquired a reputation for poor customer service. I know that Santander is working hard to improve things in this area, but I can’t say for sure whether customers are noticing a difference yet.

Still, if you’re willing to take the risk on the customer service front, this account has a lot going for it.

First Direct 1st account

My final top current account is the First Direct 1st account. As with Santander, you’ll get £100 if you open this account*, but, unlike Santander, you won’t receive any interest payments on your credit balance.

So why would you go for First Direct rather than Santander?

The simple answer is customer service. So many people have told me that they love their First Direct account. In fact, lovemoney.com readers voted First Direct the No.1 brand for current accounts in our personal finance awards.

First Direct is so confident you’ll like the account, the bank will pay you another £100 if you decide to switch away from the account within a year of opening.

However, this account isn’t realistic for everyone as you have to pay in £1500 a month for three months before you’ll be paid the £100 reward.

So that’s the lowdown on what I think are the UK’s top three current accounts. Hopefully one of them will tempt you into making the switch....

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