At a time when savings rates are reaching record lows, there are clearly far fewer ways of earning a decent return. Many are looking for alternatives, and surprisingly, a current account could be a salvation for savers weathering the current climate, thanks to the generous rewards they offer.
By making use of the Current Account Switch Guarantee (which guarantees a successful switch within seven days or less, and has been in force for three years this month), spenders and savers alike could earn up to £220 in the first year when moving their account.
In fact, our research shows that the most rewarding current accounts can offer an equivalent interest rate of up to 11% (based on £2,000 cash saved in the first year), thereby giving the full £220 return. In contrast, the average easy access savings account would pay just 0.46%, which translates to a dismal earning of only £9.20 in the first year.
Check out the table below to see the kind of returns you could achieve with some of the top current accounts on the market:
So why not give it a go? The cash rewards available means it could be a great time to take advantage, yet despite the Switch service (and the incentives), millions could still be missing out on a better deal, with it being estimated that just three million people have ditched their old account since 2013.
Rachel Springall, finance expert at Moneyfacts, sums it up: "Savers and spenders should definitely consider using a current account as a way of getting something a little extra, particularly with savings rates plummeting to record lows."
Just make sure you're prepared: the most important rule in using current accounts to earn cash is to meet eligibility criteria, which could be minimum funding requirements, or the need to bank online or set up direct debits, so it's important to be aware of these before switching.
However, it isn't advisable to move to an account just for its perks; it must be a cost-effective choice and one that suits your needs. Bear in mind things like overdraft charges if you regularly dip into it, and be on the lookout for ways to save elsewhere (fee-free banking or a package of insurance products, for example).
"A decent current account can give customers so much more than just free cash," added Rachel. "With high interest rates on offer, exclusive products and even rewards on spending, there is an abundance of great incentives available. Borrowers can save cash too, with some accounts offering cost-effective overdrafts that could save frequent users hundreds of pounds.
"While it may seem an effort to compare current accounts, given the variety on offer, it is worthwhile to establish if any money can be saved, either in overdraft charges or by earning a little something extra each month."
Compare the top current accounts to see if you could benefit from a change
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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