Top Five Current Accounts

Does your current account measure up to the best on the market? Take a look at the winners and decide whether you should upgrade to a better model.

Most of us probably open a current account when we're teenagers and stick with it for decades without even thinking there might be something better out there for us. Not many things in life enjoy that kind of loyalty! Ok, so it's probably not out of a misguided allegiance that we stay faithful to our bank, but it's more likely we think it's just far too much hassle to consider moving on elsewhere.

Although switching current accounts was once a pretty onerous task, these days it's far simpler. All you need to do is get in touch with the bank or building society you want to switch to and they'll do the rest for you. Bear in mind it can take a few weeks to complete the whole process, but if you get the impression your old bank is dragging its feet, you have every right to complain.

So why would you want to switch when your old bank is safe and familiar? Well it's true the grass isn't always greener on the other side of the fence, but when it comes to current accounts there's a fairly high chance trading in your old model will pay off.

Perhaps you're earning a pitiful rate of interest on your credit balance -- or even worse, none at all -- or the charges on your overdraft seem excessively steep. Maybe your bank charges you a monthly fee just for the privilege of having a `premium' account. I'm particularly unimpressed by this because there's plenty of accounts that offer great terms but don't want a fee from you in return so I can't see you're really getting anything extra for your money.

The great thing is you don't have to put up with it, whatever your grumble. One of the most common complaints is current accounts which don't pay any interest while you're in credit. So first of all I've taken a look at the top five accounts with offer the best rates if you usually stay in the black:

Top 5 Current Accounts: In Credit Rates (based on a typical balance of £1,000)

Accounts with age restrictions which exclude most customers, service charges and high minimum funding requirements have been discounted.

Most of these accounts measure up pretty well to the current market-leading savings accounts. In fact, I reckon you can't go far wrong with an interest rate of 6% or more.

That said, 4 of the 5 accounts shown drastically cut the rates on balances over a certain level. If you tend to maintain a pretty high balance in your current account then it's sensible to move some of the excess to a best-buy savings account instead.

A couple of the accounts - Abbey Current Account and Coventry Current Account - even have an interest-free overdraft buffer which means if you accidently slip into the red you won't get charged.             

But if your balance tends to head increasingly further into negative territory as the month passes, then you'll need to look for a current account with excellent overdraft facilities. Overdrafts equal big profits for banks provided by a nasty combo of high interest charges and fees, so I've hunted out the best 5 accounts which will keep these costs down to the absolute minimum:

Top 5 Current Accounts: Overdraft Rates (based on a typical overdraft of £1,000)

Accounts with age restrictions which exclude most customers, service charges and high minimum funding requirements have been discounted.

The first 3 accounts shown don't charge any interest and that applies to authorised and unauthorised overdrafts (although some charge a small usage fee). In an ideal world you wouldn't need to go beyond your agreed overdraft limit but lapses do occur every now and then so it's good to know not every bank will sting you if you do.

Just be aware many accounts apply eye-wateringly high interest rates and fines on unauthorised overdrafts. Rates which far exceed 20% aren't uncommon so this is a particularly expensive way to borrow and you should avoid it.

So what are you waiting for? Ditch that old current account and upgrade to a new one by comparing your options at the Motley Fool Current Account Centre. This could be the start of a beautiful friendship!

More: Don't Be Robbed By Your Bank! | Snap Up A Better Current Account.