Looking for a decent interest rate for your current account? We look at the best options for earning interest on your in-credit balances.
If you’re looking for a place to stash your savings that offers a decent interest rate, one savvy option could be a high-interest current account.
While the vast majority of bank accounts pay little to no interest whatsoever, there are a few that actually offer even more generous rates than some savings accounts.
But it’s worth stressing that the best high-interest current accounts are mostly ideal for small pots of cash and the headline rate is often reduced after a year, so you might need to switch again after 12 months to keep earning a top rate.
We'll now reveal which banks will pay you a generous rate on in-credit balances.
For those who spend more of the month in the red, see our top accounts for cheap overdrafts.
Nationwide – 5% + access to 6.5% regular saver
If you open a new FlexDirect account, Nationwide will pay you 5% AER on up to £1,500 for 12 months (falling to 1% thereafter).
To qualify for the rate, you'll need to deposit at least £1,000 a month into the account.
In addition, you'll receive 1% cashback on spending for 12 months (capped at £5 per month).
You'll also have access to the bank's Regular Saver, which pays 6.5% AER on monthly deposits of up to £200. Be aware, the rate falls to 2.15% if you make four or more withdrawals per year.
At the time of writing, Nationwide is also offering a £175 cash bonus if you open a new account.
Kroo – 3.85%
Kroo, a new app-only bank, currently offers 3.85% AER on balances of up to £85,000 with its free current account.
The rate applies to deposits of between £1 and £500,000.
The bank also says it’ll plant two trees for every new customer that signs up, plus there are no fees for spending abroad.
Starling – 3.25%
Challenger bank Starling pays 3.25% AER for balances of up to £5,000 in its free current account.
The rate applies to all savings in the current account, including funds held in dedicated ‘Savings Spaces’ and linked children’s accounts.
The rate applies to both personal and joint current accounts.
On top of this, Starling won't charge you any fees if you make purchases or use your card abroad.
Santander – 3% or access to 6% linked savings account
If you open an Edge Up account, which costs £5 per month, you'll earn 3% AER on balances up to £25,000.
In addition, you'll also receive up to £15 in cashback on certain household bills and essential spending (a total of £30 per month).
To qualify for the Edge Up account, you'll need to pay in at least £1,500 per month and set up at least two Direct Debits on the account.
Alternatively, the bank's Edge account offers access to a linked savings account, which pays 6% AER on balances of up to £4,000. Note, this rate includes a 1.5% variable bonus in the first 12 months.
The account carries a £3 monthly fee.
You'll also get 1% cashback on selected household bills when you pay by Direct Debit, which is capped at £10 a month, plus 1% cashback at supermarkets and on travel costs when you use your debit card (up to £10 a month).
Be aware, you'll need to pay in at least £500 per month into your Edge account and set up at least two Direct Debits.
At present, the bank is also offering a £150 switching bonus.
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