Suren Thiru discusses the rise in interest rates
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The Bank of England recently hiked the base interest rate to three percent putting pressure on the banks to raise the interest rates on their accounts. Here are the 10 top paying current accounts on the market, as listed on moneyfacts.co.uk.
5 percent – Nationwide Building Society FlexDirect
The five percent interest rate lasts for 12 months and applies to balances up to £1,500, with account holders obliged to pay in at least £1,000 a month.
Customers can also get £200 if they are switching from another bank or building society.
After the first 12 months of the account being opened, the interest rate drops to a 0.25 percent variable rate.
Another feature of the account is it comes with an interest-free arranged overdraft for 12 months, after which an interest rate of 39.9 percent a year compounded interest will apply to the arranged overdraft.
3 percent – Santander 123 Mini Current Account
The three percent interest rate applies to balances between £1,500 and £2,000, with one percent for balances up to £999 and two percent for balances between £1,000 and £1,499.
The account is available for young customers up to the age of 17 with a trustee needed to open the account for children under 13.
If the trust status is not removed when the person turns 18, the interest rate will fall to 0.1 percent.
Customers aged 13 and over must open and manage the account themselves, and up to £300 can be withdrawn from the account each day.
2.5 percent – TSB Under 19s account
The account has to be opened in branch and pays 2.5 percent on balances up to £2,500, falling to 0.1 percent for higher balances.
This account for younger customers comes with the bonus of discounted AA driving lessons for people who have reached the age of 17.
Customers can get £36 off driving lessons and after passing their test they can get another £20 off Pass Plus lessons.
People can use Apple Pay for the account once they have reached age 13 and Google Pay once they have turned 16.
2.02 percent – Virgin Money M Plus/Club M Account
Customers can get 2.02 percent on balances up to £1,000, with account holders required to open a linked savings account with the bank, with a deposit of at least £1,000.
The account comes with the bonus of no charges when taking out money abroad and customers can get 25 percent cashback for 60 days on supermarket and fuel spending.
Customers have to complete a full switch using the Current Account Switch Service, including at least two direct debits.
People are also required to sign up to Virgin Money Cashback in the mobile app.
Other current accounts offering the highest rate of interest include:
- 1.76 percent – AIB Student – age 12-18
- 1.51 percent – Santander – Select Current Account
- 1.51 percent – Santander – Private Current Account
- 1.5 percent – Santander – 123 Current Account
- 1.26 percent – Virgin Money – Private Current Account.
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