The five best high-interest current accounts for 2023

If you are fed up with your current account and looking to make a move, it’s easy to get lured in by perks, freebies and cold hard cash.

But don’t make the mistake of assuming a provider that offers a switching incentive is the best option for you.

In many cases, you’re likely to be better off focusing on the benefits you get after you’ve opened your new account. 

Rachel Springall, from Moneyfactscompare.co.uk, says: “Moving to a new bank is easy thanks to the Current Account Switching Service, but while some will pay an upfront cash incentive, you need to weigh up the overall package before committing.”

Right now, you might want to give some serious consideration to the raft of high-interest current accounts on offer. These pay decent interest, and in some cases, more than many standard savings accounts on the market.

Here we take a look at some of the top interest-earning current accounts available now.

BANK 1 – Kroo

New app-based bank Kroo recently increased the rate on its fee-free current account from 4.1pc to 4.35pc – good news for customers of this fully-licensed digital option.

This rate is paid on balances up to £85,000, beating some of the top-paying easy-access savings accounts on the market. 

Andrew Hagger, finance expert from Moneycomms, says: “If you’re happy to do all your banking via an app on your smartphone, Kroo is my number one choice. Paying an impressive 4.35pc, it’s a great option for savers.”

With Kroo, interest is calculated daily, and paid monthly, on the first day of the month.

In addition, you don’t get charged for making payments with your card while overseas. As an extra bonus, there are also no fees for using a cash machine abroad until October 31.

While you may not be familiar with the name Kroo, rest assured you get the usual protection of up to £85,000 from the Financial Services Compensation Scheme.

BANK 2 – Santander

For those happy to pay for their current account, the Santander Edge Up might be worth a look, as it’s offering a decent 3.5pc interest on balances up to £25,000.

While there is a £3 monthly fee to pay, you should soon recoup this if your balance is large enough. 

Mr Hagger explains: “If you can keep £25,000 in the account for 12 months, at the current rate, you’ll earn £875 in interest. This is another great choice for savers.”

With this account, you can also earn 1pc cashback on selected household bill direct debits, and 1pc on shopping (up to £15 per month), as well as on certain travel spending.

Mr Hagger adds: “This account offers great interest rates, along with some extra ways to mitigate the monthly fee.”

No fees are levied for card purchases or cash withdrawals overseas. To be eligible to keep the account open, you’ll need to deposit £1,500 each month.

BANK 3 – Chase

Chase, from Wall Street giant JP Morgan, is an app-based bank, and pays 1pc interest on any balance in your current account, with no upper limit.

It has other benefits too, Mr Hagger explains. “You get 1pc cashback on debit card spend, up to a maximum of £15 per month,” he says. “You can also link to a Chase easy-access saver paying 3.8pc on amounts up to £500,000. It’s easy to move your money around to get the maximum return on your cash.”

Chase’s debit card is travel-friendly, as it’s fee-free to use overseas. You also get access to a linked Chase saver account paying 3.8pc, and a ‘round-up’ account paying 5pc on balances rounded up to the nearest £1. There is no monthly fee, and no minimum deposit to make (for the first year).

BANK 4 – Nationwide

The fee-free Nationwide FlexDirect current account pays 5pc on balances up to £1,500 for the first 12 months after you open it. 

Mr Hagger says: “This may look attractive, but the downside is that the rate drops to 1pc from year two.”

Also, to qualify for these rates, the account must be funded with £1,000 per month.

Note that 5pc interest is only on offer if you’re new to FlexDirect – if you’ve had this account before, you’ll only be able to snag 1pc.  

Bank 5 – Barclays

Barclays pays 5.12pc on balances up to £5,000 in its linked Rainy Day Saver account.

But to qualify, you’ll need to be a Blue Rewards member, and this will mean paying a £5 monthly fee. From there you can apply for the Rainy Day Saver account. 

You’ll also need to pay a minimum of £800 a month into the current account., sign up to online or mobile banking and keep paying that fee – though it also offers £5 cashback each month if you make 2 or more direct debits, so you can effectively wipe it out. 

Though you can pay in more than £5,000 to this account, anything above that amount will only get 0.15pc interest. 

The pros and cons of a high interest account

If you choose a high-paying current account, you can essentially use it as a sort of easy-access account, as you can earn a decent return without losing access to your cash.

Tread carefully though, as most interest-earning accounts come with a raft of restrictions and strict eligibility criteria. This might include a minimum monthly funding requirement or a limit on the amount of the balance that will earn interest.

You also need to check for any fees, charges and maximum daily cash withdrawals – and find out about the overdraft rate, just in case. 

Save in a separate high-paying account

If you do end up with a current account which doesn’t pay a top rate on balances, it’s easy to move money to a high-paying savings account.

Mr Hagger explains: “Online banking has made things quick and simple. And with top easy-access accounts including Tandem Bank paying 4.65pc and Shawbrook Bank paying 4.36pc, you can benefit from better rates, then have the option to switch the money back to your current account as and when you need it.”