Switching on the rise: 5% interest rates are just too tempting

30th April 2014

More than 600,000 people have switched their current account in the last 6 months, an increase of 14% on the same period last year. This figure initially seems pretty impressive however with 46 million current account customers in the UK it’s still low in relative terms.

That said the introduction of the new faster switching service has helped improve awareness and movement in the market, bringing the switching time down to just 7 days.

How does all this help savers?! Current accounts have become the new way to save, offering market leading rates on limited individual savings balances that if managed sensibly could allow savers to save a hefty lump sum by using a number of providers and accounts.  These pseudo savings accounts offer up to 5% gross/AER – although there are strict terms and conditions that must be met in order to earn these rates, it’s not completely straightforward but can be with it to achieve, in most cases, more than double the interest you can get on a standard savings account.

The rates are head and shoulders above most savings rates albeit perhaps not without some organisation and planning.

For those happy to do so you could improve the interest you’re receiving, better still, you don’t need to join the 600,000 people on the move by switching your current account….unless you want too of course.

If you are looking at opening a high interest current account to take advantage of the excellent rates they are paying, the Nationwide FlexDirect is still the best rate. It pays 4.89% gross/5% AER on £2,500. *

If you have considerably more to deposit the Santander 123 account pays 2.96% gross/3% AER on total balances between £3,000 and £20,000.

Full details of all the best high interest paying current accounts can be found here.

*The Nationwide account includes a bonus of 3.89% for 12 months. To ensure you are aware of rate changes to these and your other accounts you can use our free market leading Rate Tracker© service.

 

 

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