Best current accounts for 2014

You could get a better deal by switching bank this year. Here's what's currently on offer.

The year 2013 was arguably an all-time low for the banking industry. There were IT meltdowns, mis-selling scandals, rate-rigging charges and balance sheet black holes.

The good news is that if you’ve resolved to switch your current account, you can now do it within seven working days. And competition for your custom is fierce.

Here are the top accounts for different circumstances.

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If you fancy a joining bonus

There are a couple of banks offering a tempting cash carrot for you to switch to them. First Direct has once again increased the golden hello on its 1st account from £100 to £125. You need to transfer at least £1,000 a month into the account to qualify.

You can also apply for a £250 fee-free overdraft. And if you leave the bank between six months and a year after joining, it’ll pay you another £100. First Direct has a proud reputation for its customer service, with a bevy of awards to back it up.

Alternatively, Halifax pays £100 if you switch your account to them. If you take out the fee-free Reward current account, you’ll also earn £5 every month you pay in at least £750, pay out two direct debits and stay in credit.

If you want to be paid interest

Many current accounts are now paying decent interest rates, in fact higher than most savings accounts.

Here’s a breakdown of who pays what, and the small print.

Account Interest rate AER Notes

Nationwide FlexDirect


Rate for first 12 months you hold account on balance of up to £2,500

Clydesdale Bank Current Account Direct


Rate until March 2015 on balance of up to £3,000

Yorkshire Bank Current Account Direct


Rate until March 2015 on balance of up to £3,000

Santander 123 Current Account


Rate on balances of £3,000-£20,000 (lower rates apply to smaller balances). Annual fee of £24 but account offers cashback on some household bills paid by direct debit

Lloyds Bank Classic Account with Vantage


Rates on balances of £3,000-£5,000 (lower rates apply to smaller balances)

Bank of Scotland Classic Account with Vantage


Rates on balances of £3,000-£5,000 (lower rates apply to smaller balances)

TSB Classic Account with Enhance


Rates on balances of £3,000-£5,000 (lower rates apply to smaller balances)

If you want to earn cashback

Many banks have now introduced cashback incentives. Yet you'd generally be better off using the combination of a cashback website such as Quidco or TopCashback and a cashback credit card.

The exception is the Santander 123 account, which pays cashback on certain household bills when you pay them by direct debit from your account. It also pays interest on credit balances. However, there is a £2 monthly fee to take into account, so make sure you're going to earn more than enough to cover that.

Compare cashback credit cards

If you want a free overdraft

Free overdrafts are slowly being consigned to the past. Nationwide has the only current account offering a decent-sized free overdraft. However, even the FlexDirect account only offers the overdraft for a year, and it’s subject to your credit status.

The Santander 123 and Everyday accounts both offer fee-free overdrafts, but only for four months.

If you regularly dip just into the red, First Direct’s 1st account has a £250 fee-free buffer, while the Co-operative Bank's Current Account Plus offers £200. These accounts require you to make a minimum monthly deposit: £1,000 and £800 respectively.

Compare current accounts with overdrafts

If you want to switch on ethical grounds

The crisis engulfing the Co-operative Bank has led to it being majority controlled by external investors, presenting a potential problem in terms of it maintaining its ethical credentials. The board, aware of this, has gone as far as to get this written into its constitution. Yet for many people this isn't enough.

The campaigning website Move Your Money rates banks and building societies' ethical credentials across five categories: honesty, customer service, culture, supporting the economy and ethics.

Based on those criteria, it rates Cumberland Building Society, Reliance Bank and Coventry Building Society as the top ethical picks.

Compare current accounts

More on banking and borrowing:

Best credit cards for 2014

The cheapest personal loans

The banks with the worst online banking security

Best buys that are only for banks and building societies' existing customers


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