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Compare high-interest current accounts
Earn interest on your current account balance
High interest current account deals
How high-interest current accounts work
High-interest bank accounts are exactly what the name implies: current accounts that offer relatively high interest rates on your balance – often more than some savings accounts.
These accounts have gained popularity in recent years because of historically low interest on savings accounts and banks and other providers have used them as an incentive to attract new customers.
However, these accounts often come with a catch. They may have certain requirements for you to be eligible to earn interest, such as a minimum monthly deposit amount, a time limit on the interest deal, or an upper limit on how much of your balance will earn interest.
For example, if the bank offers 5% interest on up to £2,500 this means you could have £5,000 in the account but only earn interest on the first £2,500.
That said, they can be a good option if you meet those requirements, as you could earn more interest than on most easy-access savings accounts.
How do bank interest rates work?
Interest rates can be generally related to the Bank of England base rate. The higher the base rate, the higher interest rates on savings, but also on debt products like credit cards and mortgages.
Banks use the Bank of England base rate as a guide to how much interest they charge or reward you with on their products. They don't just have one set rate, but have different rates for different products.
The interest rate you will be paid by your bank on your deposits is known as the Annual Equivalent Rate (AER). Getting the high interest rate on a particular account may depend on:
How long you’ve had the account
How much money you have in your account
The amount you pay in every month
When you’re looking for the best current account interest rates, make sure you’ll meet the bank’s criteria to secure the high interest rate. Some offer you a higher interest rate for an introductory period then a much lower rate after that.
There are also current accounts that let you apply for a linked high-interest savings account rather than getting the interest from the current account itself.
Pros and Cons
Pros
Cons
How to find the best high-interest current account
Compare high-interest accounts
Compare deals from different providers to find which bank offers the highest interest rate.
Check eligibility criteria
Make sure you meet all the requirements to get the highest interest rate offer.
Apply
Fill out the application for your chosen bank and provide the required proof of ID documents.
Jargon buster
Account number
The account number is the number that identifies your bank account. Typically, it's eight digits long, and unique to your account. If you have several accounts, each account will have its own account number.
You'll mostly use it, along with your sort code, when carrying out a bank transfer.
AER
The Annual Equivalent Rate (AER) shows how much interest you'll earn over a year if you leave your money in the account.
It's worked out using a complicated formula, but essentially works by factoring in compound interest.
Direct Debit
This is typically a regular scheduled payment taken from your account by an external party with your permission. While the date is typically fixed, the amount can vary.
Examples of Direct Debits include your monthly council tax payment, internet bill, phone bill, or even credit card payment.
Contactless payments
Contactless technology allows you to pay for goods and services using your debit or credit card without using your PIN. You can pay for transactions of up to £100 using contactless.
IBAN
IBAN stands for international bank account number. This number identifies your account, the bank it's in, the branch it belongs to and the country where the bank is. It's part of a global system that ensures international money transfers end up in the account they were intended for.
You can typically find the IBAN for your account on your monthly bank statement, or in your online banking or banking app.
Sort code
A sort code is a six digit number that identifies your bank and usually required when making payments by bank transfer.
Standing order
Standing orders are scheduled payments for which the amount and date of payment are fixed. They are typically used for expenses, such as bills and rent.
Payments by standing orders can usually only take place on weekdays. If the scheduled date falls on a weekend, it'll go through on the next working day.
FAQs
What does high interest mean?
What constitutes high interest depends on the state of the market at the time. Interest rates can change, going either up or down.
By using our comparison tool, you'll be able to view current interest rates and find an account that best suits your needs.
Is the interest rate fixed?
Not necessarily – it could go up or down. Some banks may also only offer the higher interest rate up to a certain balance, after which it drops to a lower rate for higher balances.
For example, if you have £5,000 in your account, a provider may offer 5% on the first £1,500 but 1.5% on anything more. Even that could be capped at £2,500.
Can I access my money any time?
Yes. While it may offer interest, it is still a current account, offering all the features and services that a regular current account would. You can access your money as you fit, like you would with any current account.
Will I have to pay a fee?
Possibly. Some high-interest accounts do charge a monthly fee but you may not have to pay it if you meet the minimum requirements set by the provider.
How often is the interest paid?
Typically, most high-interest current accounts will pay your interest monthly, but some may pay it annually.
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