Top 10 accounts offering high-interest rates and incentives

Savings accounts: Claer Barrett outlines where to get good rates

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With living costs rising, Britons will be searching for accounts that offer the best returns for their money. While savings accounts are offering some of the highest rates seen in decades, they’re still not quite beating the UK’s spiralling inflation rate. Savvy savers might be looking for an alternative, and high-interest current accounts could be a good option.

High-interest current accounts offer high rates of interest on in-credit balances and in some instances, cash rewards.

These accounts benefit people looking for easy access and a better return for their money, as they often offer higher rates of interest than most savings accounts. Banks and building societies also regularly compete for business, meaning higher rates and incentives are on offer with these accounts.

However, these accounts typically require an account holder to have a certain annual income requirement and offer interest after a specific minimum amount is deposited each month, so it’s important to properly assess the market to find the most suitable deal.

But for those interested in the current accounts offering the highest rates of interest right now, Moneyfacts has pulled together the top 10.

Top 10 high interest current accounts

Placing top of the list of high-interest current accounts is Nationwide BS’ FlexDirect (Funded) with an Annual Equivalent Rate (AER) of five percent in-credit interest per year.

At least £1,000 must be deposited into the account per month, not counting transfers from other Nationwide accounts or Visa credits, and AER will drop to 0.24 percent variable after the first 12 months.

The account offers a £200 switch incentive when at least two direct debits are switched using the Current Account Switch Service (CASS).

Interest is calculated on the last day of each month and is paid on the first day of the next month.

Coming second is TSB Under 19s Account with an AER of 2.5 percent.

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Interest is paid monthly, however, the gross variable rate interest (2.47 percent) will apply on balances up to £2,500. Any money over £2,500 will earn 0.1 percent AER variable.

The account offers discounted AA driving lessons at age 17, but it must be opened in a branch – not online.

Ranking third on the list is Virgin Money’s M Plus Account with an AER of 2.02 percent.

The 2.02 percent rate applies on balances up to £1,000, however, the account also comes with a number of additional perks, such as cashback rewards.

Customers can earn 25 percent cashback for 60 days on supermarket and fuel spending when using a Virgin Money debit card, up to a maximum amount of £160.

To qualify, customers must complete a full switch using the Current Account Switch Service, including at least two direct debits, sign up for Virgin Money Cashback in the mobile app and deposit at least £1,000 into a linked savings account within 45 days of account opening.

Coming in fourth is Virgin Money’s Club M Account with an AER of 2.02 percent.

Similar to Virgin Money’s M Plus Account, the 2.02 percent AER is applied to deposits up to £1,000 and is paid monthly.

However, this account costs £14.50 a month to run as it offers a variety of insurance benefits, including worldwide family multi-trip travel insurance, worldwide family mobile and gadget insurance, as well as UK breakdown cover.

Placing fifth is Santander’s 123 Mini Current Account with an AER of two percent.

The account is for people aged between 13 to 18 and the interest rate is paid on credit balances up to £2,000.

In sixth place is AIB’s Student (12-18) Account with an AER of 1.76 percent.

This is a fee-free account and once the account holder reaches 18, they’ll automatically be moved into a Student+ account.

Placing seventh is Santander’s 123 Current Account with an AER of 1.41 percent.

This account costs £4 per month to run and interest is paid on credit balances up to £20,000.

It requires minimum deposits of £500 a month and offers a range of additional benefits, such as cashback on debit card purchases with selected retailers, as well as four percent cashback on gas and electricity bills for two months.

In eighth place is Santander’s Select Current Account with an AER of 1.51 percent.

This account also costs £4 a month, but the account holder must either pay their main income of £5,000 into the account or keep £75,000 in any Santander investment(s), savings or current accounts in order to open it.

Account holders can earn one to three percent cashback on selected household bills, including council tax, gas and electric, and water bills, paid by direct debit every month. Cashback is paid monthly and capped at £5 per month on each of these bills.

Placing ninth is Santander’s Private Current Account, also with an AER of 1.51 percent.

This account also costs £4 to manage and is designed for accountholders with a gross annual income of over £250,000 or savings and investments of over £500,000.

It comes with a premium debit card and a preferential overdraft and account holders can withdraw up to £1,500 daily from their balance at cash machines.

After paying in at least £500 a month and setting up two or more active direct debits, customers will also be eligible to benefit from the cashback incentives.

Last but not least, Virgin Money’s Private Current Account places tenth with an AER of 1.26 percent.

This account comes with a £25 a month fee to run and is available to individuals with annual earnings of at least £75,000, joint incomes of £100,000, or investable assets of £100,000.

The account comes with a number of additional benefits, including access to a named Private Manager to help with complex financial needs and a dedicated Private team to assist with day-to-day banking.

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