For the most part, any current account serves precisely the same purpose. It is your everyday bank account for withdrawing money, receiving your monthly salary and paying your bills. However, there are some important differences between the numerous options available, and you should take these into consideration if you are considering taking advantage of the recently launched 7-day switching service.
This new service allows you to easily switch to a new current account within seven working days. Previously, it could take anything up to a month. For the most part, the process is automated as well. You will be able to use your old bank account right up until the day of switching. When you are switched to the new current account, any balance is transferred along with any direct debits, standing orders or streams of income.
There are various reasons to switch, and one of them is the recent launch of some high-interest current accounts from various banks and building societies in the United Kingdom. Interest rates on current accounts are practically non-existent in many cases, but now there are some offers promoting rates, subject to certain terms and conditions, of four percent or even more. The following takes a look at some of the best.
Clydesdale and Yorkshire Bank Current Account Direct
Clydesdale Bank and its partner company, Yorkshire Bank provide their Current Account Direct bank accounts. Both banks provide an identical service with exactly the same set of terms and conditions. With a fixed interest rate of 4% AER until March, 2015, this current account is one of the best available in the country for those who want to earn interest on their money. After March, 2015, the interest rate drops to 2% AER. These rates are comparable, if not better than, those with typical Cash ISA savings accounts, making them ideal for those who are earning enough money to be able to take advantage of the service. In order to earn, you will need to have £1,000 or more going into your account every month. Interest is paid on up to £3,000 credit in your account.
Nationwide FlexDirect Current Account
The Nationwide Building Society has long offered some interesting alternatives those provided by banks in the UK. Its FlexDirect account provides the highest interest rates currently available with any bank account in the country. For any balances of up to £2,500, an interest rate of 5% AER is paid for the first twelve months from opening the account. You will need to be depositing at least £1,000 per month in order to be eligible, however. After the initial twelve months, this will decrease to a variable rate of one percent, and you will still need to be paying in £1,000 per month or more.
The Nationwide FlexDirect account also offers some additional incentives, including a fee-free overdraft facility for the first year. However, after this period, there will be a 50p fee on any money withdrawn on the pre-arranged overdraft. The amount that you will be able to borrow is largely subject to your credit history and rating. Both online and mobile banking are supported, and free text alerts are provided whenever a payment is due. There are no monthly fees either.
Santander Current Account
With 1.8 million customers in the UK, Spain’s Santander has grown considerably in recent years. They are currently offering a unique current account which combines both cashback features and high interest rates. You will be paid cashback on both your household bills and the remainder of your bank balance. However, there is a fee of £2 per month to keep this bank account open.
Cashback promotions include 1% back on Santander mortgage payments, council tax and water bills, a 2% cashback on electricity and gas bills and a 3% cashback on mobile, broadband, telephone and television packages. Interest rates paid on credit in your account start at 1% for balances over £1,000, 2% on balances over £2,000 and 3% on balances between £3,000 and £20,000.
To take advantage of these features, you will need to fund the account with at least £500 per month and set up two or more direct debits.