High-interest bank accounts are exactly what the name implies: current accounts that offer relatively high interest rates on your balance.
These accounts gained popularity in recent years because of historically low interest on savings accounts so banks and other providers used them as an incentive to attract new customers.
However, many savings rates have now overtaken those offered by current accounts.
High-interest bank 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 £1,500 this means you could have £5,000 in the account but only earn interest on the first £1,500.
That said, they can be a good option if you meet those requirements, but bear in mind that you could earn more in a savings account.
Compare deals from different providers to find which bank offers the highest interest rate.
Make sure you meet all the requirements to get the highest interest rate offer.
Fill out the application for your chosen bank and provide the required proof of ID documents.
Interest rates are linked to the Bank of England base rate. The higher the base rate, the higher the 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’ll 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 open a linked high-interest savings account rather than getting the interest from the current account itself.
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.
Not necessarily – it could go up or down. Some banks may also only offer the higher interest rate up to a certain balance.
For example, if you have £5,000 in your account, a provider may offer 5% on the first £1,500 but 0% on anything more.
Yes. While it may offer interest, it’s still a current account, offering all the features and services that a regular current account would. You can access your money as you see fit, like you would with any current account.
Possibly. Some high-interest accounts do charge a monthly fee but, in some cases, it’s refunded if you meet certain requirements set by the provider.
Typically, high-interest current accounts pay you interest monthly.
You don't necessarily need a good credit score in order to open a high interest current account. Banks will run a credit check on you if you apply, but this type of account rewards deposits and a cash balance and so may be considered as less of a risk than an account with a large overdraft for example.
Whether a high interest current account is better than a savings account depends on your personal circumstances and what you're looking to do. A high interest current account offers all the features of a typical current account alongside higher interest rates. But the rates may be capped or a fee may be charged each month for having the account. Savings accounts don't work like current accounts, but they may not come with limits on how much you can make in interest. If you're considering one or the other then it might be a good idea to read up the full details for both types of account first.
Below you can find a list of our pages about different current accounts: