Six of the best current accounts for savers
If you're a saver, you'll know how difficult it is to find a savings account that offers a decent return. In some cases interest pays less than 0.5%, which is the current level of interest rates. So it could be time to start thinking outside the box.
Since the introduction of rules allowing consumers to switch their current account in seven working days, banks and building societies have had to up their game in these stakes. The result has been a raft of new current accounts that pay better interest rates than any easy access savings account you will find.
So here are six of the best...
...to earn 5% AER
Making the switch to the Nationwide FlexDirect Account will see you earning interest that is more than four times that of the best easy access savings accounts. The account pays 5% on in-credit balances between £1 and £2,500, subject to a monthly minimum deposit of £1,000.
A word of warning though - it only pays 5% for the first 12 months the account is open and drops to just 1% after the first year.
The TSB Classic Plus Account, on the other hand, offers an interest rate of 5% on in-credit balances of up to £2,000 with no end date.
The only conditions with this account are that you must deposit at least £500 a month and sign up for internet banking and paperless billing.
...to earn 4% AER
If you've significantly more than £2,500 to deposit, it may be worth looking at the Club Lloyds Current Account which pays you more than double the rate you'd get on the leading easy access accounts.
Club Lloyds offers an interest rate of 4% AER on balances between £4,000 and £5,000, subject to a minimum deposit of £1,500 or a £5 monthly fee. You'll also have to pay out two separate direct debits from the account each month.
...to earn 3% AER
Santander's 123 Account has been lauded as one of the more innovative current accounts on the market, paying tiered interest and offering cashback on some purchases.
On balances between £3,000 and £20,000 you'll earn 3% on your balance, though you'll also have to factor in the account's £5 monthly fee.
As with the Lloyds account, you'll have to pay out two separate direct debits from the account and you'll also have to put in at least £500 a month.
Importantly, the rate of interest will be reduced to 1.5% from November 1st 2016.
...to earn cashback
The HSBC Advance current account is another option, and while this doesn't pay interest on in-credit balances, it does pay you a £150 to switch, provided you pay in at least £1,750, stay in credit and set up two different direct debits.
HSBC is also offering a £50 reward when you register for mobile and online banking meaning you could make £200.
And if you regularly do your shopping at Marks & Spencer, it might be worth switching to the M&S Current Account to take advantage of the £220 gift card on offer – Once you switch to M&S will earn a £100 gift card plus £10 gift card top up per month for up to 12 months. The gift card can only be spent in M&S stores.
In order to qualify for any of these rates, you need to set up the account as your 'main' account, which usually means paying in a minimum amount each month and setting up a certain number of direct debits.
And just like with any savings account, you should always keep an eye on the rate you're paying to make sure it doesn't drop unexpectedly – if it does, just make the switch to another account that offers a better rate.
Compare a full range of current accounts at MoneySuperMarket