What is a high interest current account?
A high interest current account is much like a standard current account, offering many of the same features for everyday usage, but you will earn higher than normal interest (AER) on the money you have deposited with the account.
What’s high interest?
From 2009 interest rates fell to record lows, which was good news for borrowers, but bad news for savers.
Many current accounts stopped paying interest altogether, so realistically any current account that pays interest at all is a ‘high interest’ current account. But typically high interest rates for current accounts will be 1-5%.
What’s the catch?
Most high interest accounts will only pay interest on certain balances (eg 5% up to £2,000, 0% on everything above this), require a minimum deposit each month, or sometimes even charge an annual or monthly fee to enjoy access to high interest rates. So it’s worth making sure that any high interest account is suitable for you, and that you’ll actually be earning interest on your deposits.
How can I get the highest rates?
It’s as simple as shopping around and comparing different accounts. But be careful if the interest with a current account seems too good to be true.
It’d be very unusual to be paid an interest rate of more than 5%, and if you are being offered over 5% you should carefully read the full terms and conditions and do a background check on the company. Namely checking they are an ‘authorised firm’ with the government’s Financial Services Compensation Scheme (FSCS).
After the financial crash your deposits up to £85,000 are guaranteed, in the unlikely event of your bank going bust. However, not all banks offering accounts are authorised with the FSCS.
Some companies may advertise something that looks like a high interest account, but is actually a riskier investment product which won’t enjoy this government guarantee for your money. This is especially something to watch out for with accounts that offer unusually high interest.
What does 'most popular' mean?
Bank accounts on this table are ranked by popularity, which we have judged according to how many clicks they got over the past 48 hours. Those with the most clicks are at the top of the table, and those with the least at the bottom.
However, the most popular account might not be the account for you. You should still take time to filter and search all the accounts listed to see if there’s one that better fits your needs.
Which banks does uSwitch's comparison include?
We compare current accounts from a wide range of high street banks and newer challenger banks. Compare our current account providers to check which ones we include.