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Maximising Interest with Multiple Current Accounts

Updated on December 15, 2016

Firstly, let me acknowledge that opening multiple current accounts within a short space of time is likely to affect your credit rating. However, unless you are planning to take out a loan, this should not be a problem (more information here).

The practise of opening multiple current accounts in order to access high interest rates has become fairly popular in the past few years, with Santander clearly leading the way with 3% on balances of up to £20,000. The table below compares the best current accounts as of December 2016.

Account
Interest
Maximum balance for interest
Extras
Catches
Potential yearly income
Santander 123
3%
£20,000.00
1-3% cashback on bills
£5 monthly fee, pay in £500 monthly, 2 direct debits monthly
>£540
TSB Classic Plus
5%
£2000.00
5% cashback on the first £100 of contactless payments each month
Pay in £500 monthly, register for internet banking, register for paperless statements and correspondence
£160.00
Bank of Scotland Classic with Vantage
3%
£5,000.00
N/A
Pay in £1,000 monthly, 2 direct debits monthly
£150.00
Club Lloyds
4%
£5,000.00
Lifestyle benefit (e.g. Gourmet Society membership)
Pay in £1,500 monthly, 2 direct debits monthly
£200.00
Halifax Rewards
0%
N/A
£5 monthly reward
Pay in £750 monthly, 2 direct debits monthly
£60.00
Nationwide FlexDirect
5%
£2,500.00
N/A
Pay in £1,000 monthly, 5% interest for first year only
£125.00
Tesco
3%
£3,000.00
N/A
N/A
£90.00

Note that Tesco requires verification of identity via post, and that the rates for Bank of Scotland and Nationwide could change very soon. Most allow for an additional joint account, whilst Bank of Scotland allows for three individual accounts.

Unfortunately, most banks are preparing to cut these interest rates from January 2017, as shown in the table below. This significantly closes the gap between the earning potential of Santander's 123 account and the rest of the field, with the Club Lloyds account falling below TSB's Classic Plus account, until the cashback offer ends in September.

Account
Interest
Maximum balance for interest
Extras
Catches
Potential annual income
Santander 123
1.5%
£20,000.00
1-3% cashback on bills
£5 monthly fee, pay in £500 monthly, 2 direct debits monthly
>£240
TSB Classic Plus
3%
£1,500.00
5% cashback on the first £100 of contactless payments each month (ends September 2017)
Pay in £500 monthly, register for internet banking, register for paperless statements and correspondence
£105.00
Bank of Scotland Classic with Vantage
3%
£5,000.00
N/A
Pay in £1,000 monthly, 2 direct debits monthly
£150.00
Club Lloyds
2%
£5,000.00
Lifestyle benefit (e.g. Gourmet Society membership)
Pay in £1,500 monthly, 2 direct debits monthly
£100.00
Halifax Rewards
0%
N/A
£3 monthly reward
Pay in £750 monthly, 2 direct debits monthly
£36.00
Nationwide FlexDirect
5%
£2,500.00
N/A
Pay in £1,000 monthly, 5% interest for first year only
£125.00
Tesco
3%
£3,000.00
N/A
N/A
£90.00

If you have the time and money, opening multiple current accounts will still provide more income in the coming year than a basic savings account, but alternatives, such as peer-to-peer lending, are becoming more viable.

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    • Larry Rankin profile image

      Larry Rankin 7 months ago from Oklahoma

      Helpful advice.

    • profile image

      blossomsb 7 months ago

      Interesting, but not really relevant for my country. I don't think we have those banks here. How about comparing Westpac, NAB and some others that are more international?

    • Tom Groves profile image
      Author

      Tom Groves 7 months ago from United Kingdom

      @blossomsb I am only young and have yet to travel beyond Europe, let alone review Australian banks! Perhaps in a few years I will be more qualified.

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