Best current accounts: Top five bank accounts for switching with rewards

Find a more rewarding deal: Some accounts promise cashback, interest and freebies

A third of us (38 per cent) have stayed loyal to the first bank we ever opened an account with, according to recent YouGov research. 

But there is little reward for staying loyal. In fact, it actually pays to ditch and switch, with banks handing out up to £175 or savings-beating interest rates, to entice you in.

Switching is easy, meaning there is no excuse for staying put.  You can find out our favourites accounts and how to switch hassle-fee below. 

Find a more rewarding deal: Some accounts promise cashback, interest and freebies

Alternatively you can click through to read our in depth guides to the best banks according to how you use your account:

We have also compiled an easy to read table of the best accounts across the board.  

Account Perks Conditions
NatWest Reward Account / RBS Reward Account £150 to switch plus 2 per cent in rewards on seven household bills. 1 per cent back in rewards at partner retailers. Comes with £2 monthly fee and requires £1,500 minimum monthly deposit. Changes planned for Feb 2020 – read more below.
HSBC Advance  £175 to switch plus one year of free British Cycling Fan membership  Requires a minimum £1,750 monthly deposit. Must use CASS to switch accounts with least two direct debits or standing orders. 
First Direct 1st Account   £50 cash to switch using the Current Account Switch Service (CASS). £250 interest-free overdraft. To earn the bonus you need to pay in £1,000 within 3 months. Pay in £1,000 a month or maintain a £1,000 balance or pay £10 per month.
Nationwide FlexDirect 5 per cent interest on up to £2,500 and fee-free overdraft, both for the first year only though.  Pay in £1,000 a month.
Halifax Reward
A £2 monthly bonus when you stay in credit Pay in £750 a month, stay in credit and pay out two active direct debits
M&S Bank Current Account
£180 in gift cards if you switch and stay. Loyalty points for spending on debit card in store and up to £500 overdraft Maintain four active debits for the first £100. For the second £80 voucher, you need to stay for 12 months, pay in at least £1,250 a month, retain four active direct debits, register for internet banking within three months of the account being open, and opt for online-only statements.
Tesco Bank Current Account  1 per cent on balances up to £3,000 and extra Clubcard points for spending on debit card £750 monthly deposit and 3 direct debits
Club Lloyds  Pays 1 per cent on up to £4,000, and 2 per cent on £4,000 – £5,000. £3 monthly fee or deposit £1,500 a month.
TSB Classic Plus  3 per cent on up to £1,500, plus a £75 bonus for you and a friend if they open an account Pay in £500 a month. You must maintain two direct debits, register for internet banking, paperless statements and paperless correspondence. 
Santander 123
Santander will pay 1.5 per cent on balances up to £20,000 plus up to 3 per cent cashback on bills £5 a month fee. You must pay in £500 a month and two active direct debits

Best account for cashback and switching incentive… NatWest

NatWest and its sibling bank RBS’ are making a bid for new customers by reviving their £150 switching incentive.  

What’s more, the deal is available on its Reward Account, which currently pays 2 per cent cashback on household bills.  

To get your hands on the cash carrot you will need to open a new account or switch in to an existing account using the Current Account Switch Service (CASS) by December 6.

It also requires that you pay in at least £1,500 and log in to online or mobile banking by January 24 2020, you will receive the cash into your account by February 21.  

Cashback is paid on seven types of household bills paid by direct debit, which the bank says pays the average customer £83 a year.

Those bills are council tax, water, gas, electricity, mobile, landline TV package and broadband.   

The cashback scheme is due to change at the start of February 2020 however. 

Instead of an unlimited amount of money back on bills, customers will receive £1 a month for logging into mobile banking and £4 a month for having two direct debits – a total £5 a month. 

After the £2 monthly fee, potential earnings will reach £36 a year, compared to average earnings previously of £59.  

Watch out

Firstly the account comes with a £2 monthly fee, so it’s worth working out first of all whether that £24 a year will substantially eat into your cashback. 

Secondly, NatWest overdrafts are expensive. The account comes with a £10 buffer, but after that arranged borrowing is charged at 19.89 per cent EAR, costing £6 a month each time you ever use it.

Unplanned borrowing meanwhile will cost you £8 a day, up to £80 a month. 

Remember the account requires a fairly hefty £1,500 minimum deposit each month though so you will need to ensure you keep this up to continue earning rewards. 

This is Money verdict

In addition to the bumper switching incentive, the account is a decent option long term for those using it to pay their household bills from, with a lower fee compared to Santander’s 123 account.  

If you plan on using it specifically to pay your bills with and nothing else, you will need some clever account management and planning.

You will need to set up a standing order that will automatically transfer £1,500 from your main account to your bills account each month- as well as the direct debits that will actually pay each bill. You would then want to set up another direct debit to sweep away the remainder of the cash back to your main account or savings.    

Thanks to the account changes it will become significantly less profitable from February, but thanks to the £150 switcher incentive its still a tempting offer.

Best account for customer service… First Direct

First Direct has revamped its switching incentive again, offering those who switch to it £50. There’s currently a bit of a lull in the battle to woo switchers with ever-larger sums of cash, so while £50 isn’t a huge amount it’s the best pure cash offer there is. 

The bank has long lorded it over other account providers in the popularity stakes and has a growing collection of customer service awards, although last year it was pipped to the post by challenger Monzo. 

On top of the £50 cash to open an account it promises to pay any unsatisfied switcher £100 cash if they wish to switch to another bank after six months, but before you have been a customer for 12 months.

Another bonus is the £250 interest-free overdraft. After that, interest is charged at 15.9 per cent – still a fairly competitive rate – up to your agreed formal overdraft limit. 

Watch out

You will need to credit the account with £1,000 in the first three months to be eligible for the £50 sweetener, and you will need to keep that up each month if you want to avoid the £10 monthly account fee.

This is Money verdict

First Direct boasts many satisfied customers and it will give you money to join and money to leave if you don’t like it. 

However, it doesn’t have any branches so if you are the sort of person who likes to do their banking face-to-face, this account may not be for you – although you will be able to use HSBC or Post Office counter services.

Also, if your balance is always firmly in credit, it may be a better option in the longer-term to find an interest-paying current account. 

Remember the cash value may seem generous but you might be better off opting for it if you want to use it for something useful like helping to pay off your overdraft or move to a savings account. 

M&S Bank currently offers the best golden welcome for switchers, but in the form of gift vouchers

M&S Bank currently offers the best golden welcome for switchers, but in the form of gift vouchers

Best account for…a golden hello (provided you stick around)… M&S Bank

If you’re happy to take your welcome in the form of M&S gift vouchers, M&S Bank offers the best one around at the moment.

You’ll get a £100 voucher when you sign up if you switch using the Current Account Switch Service, and then a further £80 12 months down the line provided you’re still with M&S Bank.

If you already hold one of its credit cards it boosts the second payment to £120, meaning a total £220 up for grabs.  

Watch out

Even more than a lot of switching offers, this one is packed to the rafters with Ts and Cs. To get the first £100, you need to maintain four active direct debits. Provided you do that, you will get your card within a month.

In order to receive the second gift card worth £80, you need to pay in at least £1,250 a month, retain four active direct debits, register for internet banking within three months of the account being open, and opt for online-only statements. 

This is Money verdict

It’s currently quite a fallow period for switching offers, so if you shop with M&S and really do want to switch your bank now then this could potentially be worth more to you than pure cash.

While M&S Bank doesn’t have any high street branches itself, you can use HSBC ones if you need to, while some M&S shops do have branches in them.

Ultimately, the £180 headline figure does jump out, but there are a lot of hurdles to jump over in order to get it, but you can still get £100 in vouchers upfront even if you don’t fancy sticking around long-term. 

Interest: Rates on specialist accounts beat most savings accounts

Interest: Rates on specialist accounts beat most savings accounts

Best account for in-credit interest… Nationwide

There are a few banks offering in-credit interest. Some offers come without a time limit or interest on larger balances so which deal is best for you will depend on individual circumstances, but Nationwide is offering the highest available interest rate on a current account. 

Nationwide’s FlexDirect account pays out 5 per cent on balances up to £2,500 for the first year – not bad considering most easy-access savings rates have slid in recent years.

Accountholders are also eligible for a 0 per cent overdraft for the first 12 months, and reduced fees of 50p per day for arranged overdrafts after that.

You must pay in a minimum monthly income of £1,000. On the last day of every month Nationwide will calculate the interest you’ve earned each day and then pay you this interest on the first day of the next month. 

Watch out

If your income drops and you can’t pay in £1,000, you won’t receive any interest that month.

The 5 per cent interest deal ends after a year, when it drops to just 1 per cent. So it may be worth looking elsewhere after the 12 months for a better return on your money.

You get an interest-free arranged overdraft for that 12 months, but after that a flat rate charge of 50p per day applies, this will be costly for those who regularly go overdrawn compared to a typical interest-charging overdraft.

Unarranged overdrafts cost 50p per day for balances under £10 and £5 per day after that, capped at £60 per month.

If you like to carry out your banking face-to-face, this account might not be good for you because you can only access internet or telephone services as a FlexDirect customer.

This is Money verdict

Accounts that are good for both in-credit and overdrawn customers are few and far between so this could be a good bet for those who have smaller balances – but can afford to pay in £1,000 each month.

Existing customers can boost their earnings by recommending Nationwide current accounts to their friends. For every person that switches on your recommendation you will both be rewarded with £100 in your account. 

Santander: offers the best current account for cashback

Santander: offers the best current account for cashback

Best account for interest on a large balance … Santander

Santander’s 123 account is not the generous deal it once was, however this could still be the best in-credit interest account for those with a large balance.

Interest on savings and cashback on bills

The 123 account will pay an AER of 1.5 per cent on up to £20,000 – earning a maximum yearly income of around £302.

Previously account holders would have earned up to £604 a year. However the 1.5 per cent rate matches the best easy access savings accounts. 

Interest is clocked up on a daily basis and will depend on what you have in your account that day. 

It also pays tiered cashback on household bills.

You get 1 per cent back on water, Santander mortgage and council tax payments, 2 per cent on Santander insurance policies and gas and electricity and 3 per cent on mobile and home phone, broadband and TV packages. 

Both the interest and cashback you earn is paid directly back into your 123 account on a monthly basis.

Watch out

The £60 annual cost will negate some of the benefits of its cashback and interest payments. 

To be eligible for cashback services you must set up a minimum of two direct debits and pay in at least £500 every month.

This account is really not for you if you often find yourself in the red. Arranged overdrafts are charged at £1 a day below £2,000, £2 a day up to £2,999.99 and £3 over £3,000.

From July 10 this year there will be no fees for unauthorised borrowing. Until then you will pay £6 per day on any unarranged amount, capped at £95 per month. 

This is Money verdict 

In reality the cut to the 123 account interest rate, combined with the monthly fee, means this is no longer the great deal it once was for many.

That said, for those with considerable savings, the 123 current account will remain a good deal despite the fee hike.

If there is any chance of you slipping into your overdraft, there is little point applying for the account as the combined charges and monthly fee are likely to cancel cash benefits. 

Santander says the average balance held in the account is £12,500, which equates to £126.25 profit – excluding cashback – even after fees have been taken in to account.

However those with a smaller balance may be best off switching to a free option. 


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