As you’ll probably know by now, I’m a liiiiittle bit money obsessed. I love finding ways to make extra cash and watching my money grow. As a result, I probably check my bank balance far too often in the hope my finances will have magically improved since the last time I looked. Well, I was in for a pleasant surprise earlier today because I checked my bank to discover I’ve earned more than £25 in interest on my Santander 123 current account this month.
To put that into perspective, when I had a Halifax Cash ISA offering a pitiful 0.25%, I earned an embarrassing £14 in the space of a year. A whole year! I’m not going to pretend to be good with numbers and so I don’t know what percentage difference we’re looking at here, but I know it’s a lot. A lot of percent.
Although I’m sure many readers of Can’t Swing a Cat will already be making good use of high interest current accounts, I bet at least some of you are missing out. I bet there’s a bunch of you hoarding all your spare cash in a low interest Cash ISAs because you’ve been told it’s the best place to put your money. Well, if this is you, you’ve been lied to, buddy. The bastards are lying to you. I bet you’ve been told that ‘Cash ISAs are tax free’ but I have news for you pal – thanks to a savings shake up earlier this year and changes to the Personal Savings Allowance, virtually EVERYONE can now get tax-free interest regardless of where they save their money.
This means that, for most people, Cash ISAs are a little bit pointless.
Chances are, your money will be far better off in a high interest current account offering 3, 4 or even 5% interest.
The good news is you can open a high interest current account online in the space of 10 minutes. You could open one on your lunch break before sitting back and watching the interest aka free money come pouring in each month.
And the best thing is – in most cases you can have more than one current account at the same time. So, if you’re a money obsessed little nutter like me, and you have a few thousand pounds in savings, you can collect bank accounts like they’re Pokemon cards.
If you have a more modest savings fund or you’re at the very start of your savings journey, it’s still worth opening one or two high interest savings accounts. You’ve just got to pick the one that is best for you!
Not sure which account(s) to get? Here are just a few to consider opening on your lunch break…
Please note that since banks regularly change their terms, conditions and offering, some of the information may become outdated over time. I will do everything I can to keep it updated to the best of my knowledge, but be sure to check the full details on the bank’s website before signing up for anything.
Santander 123
You’ll get 3% interest on balances between £3,000 to £20,000. You’ll also get cashback on selected household bills.
In order to reap these rewards, you must place £500 in the account each month and have two direct debits set up.
There is a £5 a month fee for this account but the benefits tend to massively outweigh this charge.
August 2016 update: Santander is planning to reduce the interest rate on Santander 123 to 1.5% in November.
TSB Classic Plus
You’ll get a whopping 5% interest on balances up to £2,000.
To earn the interest you must place at least £500 in the account each month and register for internet banking, paperless statements and paperless correspondence.
Find out where I stash my cash by taking a look at my post: How Collecting Bank Accounts Is Helping Me Maximise My Savings.
Nationwide FlexDirect
You’ll get 5% interest on balances up to £2,500 but only for the first 12 months – after that the interest will drop to 1%.
You must deposit £1,000 into the account each month to access the 5% interest.
Club Lloyds
Earn 4% interest on balances between £4,000 to £5,000. There are tiered interest rates for smaller amounts. You’ll also get to choose a free ‘lifestyle benefit’ such as free cinema tickets.
You must have 2 direct debits exiting the account each month and must place £1,500 in the account monthly to avoid a £5 fee.
Please note, once you’ve completed the online application form, you may need to visit your local branch to complete your application.
