Why comparing current accounts is about to get easier
Picking a new current account is set to get easier as the major banks and building societies agree to provide their information in a standard format.
Comparing current accounts is about to get easier after some of the nation’s biggest banks and building societies committed to providing current account data in a standardised format.
Barclays, HSBC, Lloyds, Nationwide, Royal Bank of Scotland and Santander have all agreed to follow a single format when detailing things like the fees, charges and benefits of their bank accounts.
The Treasury and Department for Business, Innovation and Skills, who secured the agreement, expect other current account providers to follow suit.
Current account switching
The move, which is part of the Government’s MiData programme, follows on from the introduction of the Current Account Switching Service last year which guaranteed current account switches would be completed within seven working days.
It has led to a jump of 17% in the number of people moving their current account.
For more, read How to switch your current account in 7 days.
The importance of switching
Shopping around for new deals every year or so on things like car insurance and energy has become far more common in recent years. Yet many people have stuck with the same current account all their lives. Every year in February some bank or other will produce a survey claiming that we are more likely to switch our partner than our bank account.
But by sitting on your old, naff current account, you could be missing out on a great deal, whether that’s interest on your balance, cashback on your direct debits, a better overdraft deal or even just a higher standard of customer service. Let’s take a look at the best deals around today.
The best current accounts for interest
Nationwide’s FlexDirect boasts the top rate of interest, paying a whopping 5% AER on balances up to £2,500 for the first year. After that it plunges to 1% though. You have to pay in £1,000 per month in order to qualify.
After that the Yorkshire Bank and Clydesdale Bank Current Account Direct pay 4% on balances up to £3,000 for a year, dropping to 2% after that. Again you’ll need to pay in £1,000 a month.
And then there’s the Santander 123 Current Account, which pays 3% on balances between £3,000 and £20,000. The great thing about the 123 account is that the rate doesn’t plunge after a year, so it’s a more long-term option. However, it does come with a £24 annual fee. And you need to pay in £500 a month
Finally, TSB is launching its own current account at the end of the month paying 5% on balances up to £2,000. You’ll need to pay in £500 a month.
The best current accounts for overdrafts
Nationwide’s FlexDirect is again a top option if you’re looking for a lengthy overdraft, as it comes with a 12-month fee-free overdraft.
Santander’s 123 current account offers an interest-free overdraft for the first four months, while Nationwide’s FlexPlus (which costs £10 a month) and Royal Bank of Scotland and NatWest’s Select Silver Accounts (which costs £6 a month) offer interest-free overdrafts for the first three months.
The Current Account Plus from Co-operative Bank boasts a £200 fee-free overdraft. You’ll need to pay in £800 a month to qualify.
Finally First Direct’s 1st Account comes with a £250 free overdraft.
The best current accounts for cashback
Santander’s 123 current account pays cashback on a range of different direct debits. You get 1% on Council Tax bills and Santander mortgage payments, 2% on gas and electricity bills and 3% on communications bills.
There’s also the Halifax Reward account which pays £5 a month each month in which you pay in £750, stay in credit and pay out two different direct debits. In other words, even if you finish the month with a balance of £0, you still get the £5! Not bad.
The best current account for customer service
This is an easy one. First Direct’s 1st Account wins every single customer service award going, including lovemoney.com’s own Love award!
More on current accounts:
TSB to launch new current account paying 5% interest
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