The ultimate current accounts for rate tarts!

by John Fitzsimons on 27 January 2010  |  23 comments
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You’ve been voting in your droves for the best current accounts. But who has topped the lot for offering the best return on your money?

If there's one financial product you absolutely have to choose wisely, it's your current account. It's the product that you can't get away from - you can live without a credit card or an ISA or a pension (though that's not a great idea), but you'll struggle to get by without a current account. Where would your wages go for a start?

What you look for from a current account may vary. You may be the sort of person that always ends the month in the red, so you need a good, interest-free overdraft facility. Or you may prioritise the service you receive above any other concerns.

But if you are mainly concerned with getting the best possible return on your money, then you should definitely check out the banks covered below. Because more than 2,000 lovemoney.com users have voted them the best around when it comes to interest rates.

Runners up

In third place it's the bank that gives you extra, Halifax, with its very clever Reward Account winning your praise.

Why you gave Halifax a Cheer award

Somewhat paradoxically the best current account from Halifax for getting a great return on your money actually offers an interest rate of 0%. Instead, as long as you pay in at least £1,000 a month, you'll get £5 every month with the Halifax Reward Account.

Over the space of a year, that's a return of a quite marvellous £60. And unlike other current accounts which rely on you maintaining a high level of cash in the account to get some decent interest, with the Reward Account you only have to pay that £1,000 in. It doesn't even matter if you finish each month with a balance of £1 - you'll still get a cracking return!

In second place

The first runner up prize goes to Abbey, which has turned plenty of heads with its Preferred In-Credit Rate Account and Reward Bank Account, both of which pay a magnificent 6%!

Why you gave Abbey a Cheer award

At a time when getting even a moderate return on your money has been a challenge, for Abbey to have two current accounts each paying 6% - miles more than most of its rivals - has been fantastic. Clearly many of you agree.

With the Preferred In-Credit Rate Account, you can benefit from 6% for 12 months on sums up to 2,500. You'll even get a 0% overdraft for the first four months. All you need to do is make sure £1,000 a month is paid in.

It's a similar arrangement with the Reward Account albeit without the interest free overdraft. You'll benefit from a range of extras including annual worldwide family travel insurance, Green Flag breakdown cover and identity theft protection.

However you will have to shell out £10 a month for this account.

And the winner is...

However, the provider which topped our poll is Abbey's Santander stable-mate, Alliance & Leicester, which stole top spot thanks to a cracking range of deals including its Premier Direct account paying 6%.

Why Alliance & Leicester is the best

Alliance & Leicester just edged ahead of its fellow Santander firm, Abbey to win this very competitive award principally because it has a wider range of current accounts that all pay fantastic rates of interest.

The best product it offers is the fantastic Premier Direct account, which boasts a rate of 6% in interest (fixed for a year) on balances up to £2,500, so long as £500 is paid in each month. That's just half the funding requirement of the rival Abbey deal, so it's easy to see why it's more appealing. It even offers an interest-free overdraft for the entire year.

But it's not just the Premier Direct current account. Alliance & Leicester also offers great current accounts tailored for older and younger customers respectively.

There's the Premier 50 current account, a product specifically for the over fifties which also pays a great rate of 6% fixed for a year. Additionally, it offers worldwide annual multi-trip travel insurance up to the age of 79 and a number of health benefits, including two out-patient private medical consultations a year.

However, the account will set you back £10 a month.

For younger customers, there's the Premier 21 current account, paying 5% on balances up to £1,000, with the only requirement that your earnings (wages, allowance, any regular money that you receive) is paid into the account.

Do you agree?

There you have it, the best three current account providers for getting a great return on your money, as voted for by lovemoney.com readers. But do you agree with the results?

Be sure to share your experiences with these and any other current account providers via the comment box below!

Get help from lovemoney.com!

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More: Where to find the cheapest overdrafts | The top five sneakiest banking tricks

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