Best UK current accounts

8 min Read Published: 09 Nov 2022

The best UK current accounts - July 2021Looking for a new current account? In this article, we round up 5 of the best current accounts on the market from high-street banks, building societies and digital banks. To help you choose, we've also listed the rate of interest, monthly fees, overdraft charges, and account offers you could get from each one.

What is a current bank account?

A current account is a type of bank or building society account that you use for your day-to-day spending.

This is where your salary is usually paid into, and you can set up automated electronic payments – such as direct debits and standing orders – to pay for regular bills and outgoings. Current accounts often come with a debit card, which you can use to withdraw cash from a cash machine or to make payments, including contactless payments in shops and purchases online, and give you immediate access to the money in your account.

There are dozens of current account options for UK customers, from well-known high street retailers to building societies and up-and-coming digital banks. Picking the one that's best for you can be daunting, however, so we've listed some of the things you should be looking for.

How to pick the right bank account

Before deciding on a current account, you should consider what each one has to offer across a range of areas to find the one best suited to your needs, taking into account - among other things - the rate of interest, any fees, and any additional account features.

Best interest rates

Ideally, you want a current account which pays interest on the money you've deposited in it and there are a couple of current accounts that offer interest to help your money work harder. Nationwide FlexDirect customers can benefit from 5.00% interest on balances up to £1,500 for the first year, however, you have to pay a minimum of £1,000 a month or the balance will reduce to 0.25%. Next, Virgin Money boasts 2.02% AER on its M Plus Account, but only for balances up to £1,000. Most current accounts also give you access to a savings account from the same provider, so if the interest on the current account isn't enough, check to see if they have a linked savings account with a better interest rate on offer that you could tuck some money into instead.

Lowest overdraft rates

Should you ever end up in your overdraft, you want to make sure the fees you incur are as minimal as possible. The majority of current accounts have a high charge for using an overdraft, but digital bank Starling Bank can offer rates as low as 15% on arranged overdrafts for customers with good credit scores on an assumed credit limit of £1,200. If you're concerned about paying off your overdraft, listen to our podcast episode 282 for tips and tricks on how to clear your debt.

Lowest monthly fees

To minimise additional costs, you need to pick a current account with low, or no, monthly fees. There are many which do not charge any fees at all but check the small print, as some do have monthly charges which can eat away at your balance. For example, Nationwide's FlexPlus Account has a £13 monthly fee, which gives you access to a range of extra features such as worldwide travel insurance, but you will still have to pay this fee whether you use the extras or not. You should also thoroughly check if there are fees for additional services, such as replacement cards, going over your overdraft limit, or having insufficient funds to pay any standing orders/direct debits.

Foreign currency fees

If you spend on your debit card when abroad, you may want to consider the kind of fees you could get from foreign currency payments and withdrawals. Plenty of current accounts now tout 0% fees on overseas transactions, but keep an eye out, as some, like First Direct's 1st Account, can charge up to 4.75% on cash withdrawals in foreign currency - compared to the 0% fees on Virgin Money's M Plus Account. Visit our article 'The best ways to take money abroad' for more foreign currency fee tips.

Switching incentives

Many providers offer incentives to switch to their current accounts, which can bag you free money just for joining. At the moment, HSBC And Nationwide offer the best switching offers with £200 paid when you switch using CASS but additional terms apply such as switching at least 2 direct debits a month and there is usually a minimum amount that needs to be paid into the account to qualify for the offers. Head to our article on the best current account switching offers, cashback & incentives to see the best switching offers on the market.

Bonuses and extras

Some providers have bonuses and extras which become available when you use their current accounts, such as Nationwide FlexPlus' worldwide travel insurance and UK breakdown cover. Although you should not prioritise these extras over the more important factors, such as interest or overdraft rates, they could help you to make a decision if you're deliberating between a couple of similar accounts.

Top UK current accounts (November 2022)

In the following table, we summarise some of the UK's best current accounts in November 2022. The list is not exclusive and there may be other bank accounts which suit your circumstances better so it is recommended to shop around for the best account that suits your needs. The following accounts are chosen based on the account features, monthly fees and interest rates. Some of the accounts also offer incentives to switch but not all of these are included in the table. Find out more about the best switching offers in our article, 'Best current account switching offers, cashback and incentives'.

Best UK bank accounts - a comparison

Provider Account Name Switching offer Monthly Fee Current account Interest Rate Linked Saver Interest Rate Good For
Starling Bank* Personal Current Account N/A £0 0.05% N/A App-only banking
Virgin Money M Plus Current Account N/A £0 2.02% (up to £1,000) 2.02% (up to £25,000) Earning interest
First Direct 1st Account £175 £0 0% 3.50% (max £300/month for 12 months) Customer service
Santander 1|2|3 Lite Current Account N/A £2 0% N/A Cashback
Nationwide FlexPlus Current Account £200 £13 0% 2.00% for 12 months Packaged account features

Starling Bank logo

Starling Bank - good for app-only banking

  • Account name - Personal Current Account
  • Current account interest - 0.05%
  • Monthly fee - £0
  • Arranged overdraft rate - 15%, 25% or 35%
  • Unarranged overdraft fee - £0
  • Foreign currency cash withdrawal - £0
  • Foreign currency debit card payment - £0
  • Switch incentive - N/A
  • Extras - 'Digital change jar' for storing savings separately, 'savings on autopilot rounds up to the nearest pound and transfers into a savings space

Starling Bank's Personal Current Account* is one of the best on the market, with no monthly fees, a lower-than-average overdraft rate, and no foreign currency transaction charges. However, it does not currently offer any switching incentives, and its interest rate - while not a flat 0% - is only 0.05% so may not be the most suited for those looking for a high-interest current account to make their funds go further. Check out our Starling Bank review for more information and compare other app-only banks in our article 'Best app-only banks in the UK'.


virgin money logo
Virgin Money - good for earning interest
  • Account name - M Plus Current Account
  • Current account interest - 2.02% on up to £1,000
  • Savings account interest - 2.02% up to £25,000
  • Monthly fee - £0
  • Arranged overdraft rate - 19.90% - 39.90%
  • Unarranged overdraft fee - 19.90% - 39.90%
  • Foreign currency cash withdrawal - £0
  • Foreign currency debit card payment - £0
  • Switch incentive - N/A
  • Extras - Fee-free spending and overseas cash withdrawals, plus earn cashback when you spend with your current account

Virgin Money's M Plus Account is a popular choice for those seeking high interest, with 2.02% interest on balances up to £1,000 every month. Despite the potential to incur a 39.90% charge for using an unarranged overdraft - depending on your credit limit and how much you use - an M Plus Account has fee-free overseas spending and cash withdrawals for keen travellers. Find out more on the Virgin Money website.


First Direct logoFirst Direct - good for customer service

  • Account name - 1st Account
  • Current account interest - 0%
  • Savings account interest - 3.50% up to a maximum of £300 each month for 12 months
  • Monthly fee - £0
  • Arranged overdraft rate - £250 interest-free then 39.90%
  • Unarranged overdraft fee - £20 maximum monthly charge
  • Foreign currency cash withdrawal - 2.75% plus a 2% fee (max £5)
  • Foreign currency debit card payment - 2.75%
  • Switch incentive - Receive £175 when you switch using CASS and pay in at least £1,000 within 3 months of account opening
  • Extras - 'Sweep' rounds up to the nearest pound and transfers into your linked savings account, optional First Directory package gives access to worldwide travel and mobile phone insurance

First Direct's 1st Account charges comparatively high foreign currency transaction fees, but the cash withdrawals can reduce to 2.75% without the additional fee if you make monthly payments to become part of the optional First Directory scheme. First Direct's £175 switching bonus encourages new customers but those unsure about switching accounts can also benefit from a £20 incentive. Optional access to worldwide travel and mobile phone insurance could also swing it for those looking for additional benefits. First Direct also has a 'sweep' utility which allows you to set automatic transfers into your linked savings account.


santander logoSantander - good for cashback

  • Account name - 1|2|3 Lite Current Account
  • Current account interest - 0%
  • Savings account interest - N/A
  • Monthly fee - £2
  • Arranged overdraft rate - 39.94%
  • Unarranged overdraft fee - £0
  • Foreign currency cash withdrawal - 2.95%
  • Foreign currency debit card payment - 2.95%
  • Switch incentive - N/A
  • Extras - Earn up to 3% cashback on bills but you need to pay in at least £500 a month and have 2 active direct debits as well as log into online or mobile banking at least once every 3 months.

Despite charging 2.95% on foreign currency transactions, Santander's 1|2|3 Lite Current Account has £0 unarranged overdraft fees and the potential to earn up to 3% cashback on a range of utility bills, although this is capped at £15 each month (£5 per cashback tier).


Nationwide building society

Nationwide - good for insurance and breakdown cover

  • Account name - FlexPlus Current Account
  • Current account interest - 0%
  • Savings account interest - 2.00% for 12 months
  • Monthly fee - £13
  • Arranged overdraft rate - 39.90%
  • Unarranged overdraft fee - £0
  • Foreign currency cash withdrawal - No fee
  • Foreign currency debit card payment - No fee
  • Switch incentive - £200 when you switch using CASS
  • Extras - Worldwide travel insurance, UK and European breakdown cover, mobile phone insurance and access to Flex Instant Saver with 2.00% interest for 12 months. Plus get £200 for switching to a Nationwide current account

Nationwide's FlexPlus Current Account has a monthly fee, which comes in at a noticeable £13, but this gives you access to a range of extras including worldwide travel and UK breakdown cover, plus £0 unarranged overdraft fees and £200 in cash for new customers. It also has zero foreign currency transaction fees, so if you're planning on travelling, the FlexPlus Current Account could be a great option for minimal fees and added insurance for peace of mind.

Additional reviews

We also have a range of articles on other types of accounts, including the best student bank account, the best savings accounts for £100,000, and the best stocks and shares ISAs. You can also check out our list of the best credit cards of the month.

 

 

 

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