Looking for a decent interest rate for your current account? We look at the best options for earning interest on your in-credit balances.
Over the last year, as savings rates have fallen, it’s become more difficult to find places to stash your cash that also 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 the best savings accounts.
But it’s worth stressing that the best high-interest current accounts are mostly ideal for small pots of cash or offer a decent rate for a limited time only.
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.
Virgin Money - 2.02%
The Virgin Money current account offers a market-leading rate of 2.02% AER.
While this is limited to the first £1,000 in the account, it does come with a linked access savings account with a rate of 0.35%.
Helpfully, there's no minimum amount you have to pay in each month to qualify for the account, and you can also bag a free £150 gift card with Virgin Experience Days or 12 free bottles of wine when you apply.
Nationwide - 2%
Nationwide offers a decent rate of 2% AER on its FlexDirect Current Account and you can get up to £125 when you switch – find out more here.
The rate is fixed on balances of up to £1,500 for the first 12 months, after this time the rate falls to 0.25%, which is variable. So, in your first year, you could pocket £30 from your savings.
Nationwide allows you to hold one account in a sole name and one in a joint name, so a couple could triple the amount earning 2% to £4,500.
To earn interest, you need to deposit at least £1,000 a month into the account, but you don’t need to have any Direct Debits set up, so it doesn’t necessarily have to be your main account.
Lloyds/Bank of Scotland - up to 1.5%
With the Club Lloyds and Bank of Scotland Vantage accounts, you can earn up to 1.5% AER on larger savings pots than the two current accounts mentioned above.
Both accounts feature a tiered rate, paying 0.60% on balances between £1 and £3,999, and 1.5% variable on balances between £4,000 and £5,000.
To qualify, you need to pay in at least £1,000 into your account (or at least £1,500 for the Club Lloyds account), keep your balance above £0 and set up at least two different Direct Debits.
If you pay in less than £1,500 a month into the Club Lloyds account, you’ll have to pay a £3 monthly fee.
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