Best UK current accounts

13 min Read Published: 01 Nov 2021

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 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 current account for you

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. Despite savings rates being historically low, there are a couple of current accounts that offer interest to help your money work harder, with Virgin Money boasting a market-beating 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 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. 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

With international travel back on the agenda for many, 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 "Holiday spending: Should I pay in sterling or local currency?" for more foreign currency fee tips.

Switching incentives

Many providers offer incentives to switch to their current accounts, which can bag you free money and experiences just for joining. At the moment, Virgin Money is offering a Virgin Experience gift card worth £150 or a £150 luxury case of Virgin wines for new customers, while moving to First Direct could get you £130 for free if you switch using the Current Account Switch Service (CASS) and pay in at least £1,000 within 3 months of opening your account. 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 account, such as Nationwide's 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.

The top 5 UK current accounts (November 2021)

Provider Account Name Monthly Fee Interest Rate Arranged Overdraft Rate Best For
Starling Bank Personal Current Account £0 0.05% 15.00% Low fees
Virgin Money M Plus Current Account £0 2.02% (up to £1,000) 39.90% High interest
First Direct 1st Account £0 0% 39.90% Incentives & extras
Santander Everyday Current Account £0 0% 39.94% Cashback
Nationwide FlexPlus Current Account £13 0% 39.90% Foreign currency fees

Starling Bank - Personal Current AccountStarling Bank logo

  • AER - 0.05%
  • Monthly fee - £0
  • Arranged overdraft rate - 15.00% representative
  • 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 account

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 farther. Check out our Starling Bank review for more information on the digital bank.

Virgin Money - M Plus Current Account

  • AER - 2.02% on up to £1,000
  • Monthly fee - £0
  • Arranged overdraft rate - 39.90% representative
  • Unarranged overdraft fee - 39.90% representative
  • Foreign currency cash withdrawal - £0
  • Foreign currency debit card payment - £0
  • Switch incentive - Virgin Experience Day gift card worth £150 or a £150 luxury case of Virgin Wines
  • Extras - Fee-free spending and overseas cash withdrawals

Virgin Money's M Plus Account is a popular choice for those seeking high interest, with a competitive 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 could bag you a £150 gift card or a £150 luxury case of Virgin Wines, plus fee-free overseas spending and cash withdrawals for keen travellers.

First Direct - 1st Accountfirst direct logo

  • AER - 0%
  • Monthly fee - £0
  • Arranged overdraft rate - £250 interest-free then 39.90% representative
  • Unarranged overdraft fee - £20 maximum monthly charge
  • Foreign currency cash withdrawal - 2.75% plus a 2% fee
  • Foreign currency debit card payment - 2.75%
  • Switch incentive - Receive £130 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% if you make additional monthly payments to become part of the optional First Directory scheme. Plus, its £130 switching bonus and access to worldwide travel and mobile phone insurance could swing it for those intending to stay put. It also has a "sweep" utility which allows you to round up your spending to the nearest pound and put the difference into a linked savings account.

Santander logoSantander - Everyday Current Account

  • AER - 0%
  • Monthly fee - £0
  • Arranged overdraft rate - 39.94% representative (0% for the first 4 months)
  • Unarranged overdraft fee - £0
  • Foreign currency cash withdrawal - 2.95%
  • Foreign currency debit card payment - 2.95%
  • Switch incentive - £130 cashback when you switch using CASS, set up 2 active Direct Debits, pay in £1,000 and log on to Online or Mobile Banking
  • Extras - Earn up to 15% cashback

Despite charging 2.95% on foreign currency transactions, Santander's Everyday Current Account has £0 unarranged overdraft fees and the potential to earn up to 15% cashback on a range of retailers, including Sky, Costa and Morrisons. It even offers a 0% arranged overdraft rate during your first 4 months, so if cash is a little tight at the moment, this could be a good option for minimising additional costs - that is, until the new-customer offer ends.

Nationwide - FlexPlus Current AccountNationwide logo

  • AER - 0%
  • Monthly fee - £13
  • Arranged overdraft rate - 39.90% representative
  • Unarranged overdraft fee - £0
  • Foreign currency cash withdrawal - £0
  • Foreign currency debit card payment - £0
  • Switch incentive - £100 when you switch using CASS
  • Extras - Worldwide travel insurance, UK and European breakdown cover, mobile phone insurance

Nationwide's FlexPlus Current Account is the only one on our list with 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 £100 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.