Best Bank Accounts

With so many different bank accounts out there, it’s easy to get lost down a rabbit hole of sort codes, interest and cashback rewards. This guide is designed to help make the most effective banking ecosystem for you, starting from highest likely benefit to lowest.

Do you have any significant debts? (with interest above 5-10%)

Clear off the debt first if you can, or at the very least make sure it is managed. If you are having trouble with debt, seek advice from the Government’s Money Advice Service 

Great job! 1 in 8 people in the UK are in long term debt excluding mortgages.

Do you have an emergency fund? (Enough to support you for 3-6 months)

It’s highly recommended to have an emergency fund available – 4 out of 10 UK adults do not have more £500 or more in savings and it can be disastrous in an unexpected life event. See how much you might want to save with our Little Debits Emergency Fund Calculator, then continue the guide to select the best current accounts to easily access it, and gain interest.

Great! Use that money in our guide to select the best current accounts for easy access and gaining interest

Do you have 2 or more bank accounts?

We recommend having two minimum – and even more if it benefits you. This is in case one bank crashes for some time like TSB did, or if one payment system like VISA fails, you have an alternative. Use our guide to select those that benefit you most.

Use our guide to select the best accounts for you. Switch if there is a switch reward or it benefits you, keep it if you have had it a long time and it is not costing you anything to have empty.

Before opening any new accounts, we advise you to have a method of saving your account details securely so you can access them easily later

Feel free to download our password protected spreadsheet Little Debits Bank Account Tracker for this (opens in Google Sheets, pw: littledebits)

Bank Account Guide

1. Maximise Usefulness: Bills, Travel and Packaged Accounts

Do you pay bills over £100 every month? 

Consider the following accounts for cashback on most bills paid by direct debit:

  1. Natwest Rewards – higher monthly fee but also has a higher cashback rate; generally better than the Santander deal below for total bills above £150 per month. You can calculate your cashback here then compare.
  2. Santander 123 Lite Account – consider for the lower monthly fee, particularly if you have a high proportion of mobile/broadband/TV bills or Santander mortgage. You can calculate your cashback here then compare.
Do you travel abroad more than once a year and/or like to do banking on your smartphone?

You may find it useful to have an easy access, no fee, 0% conversion account or card such as Revolut, Monzo, Starling or Tandem. Please see our Finance Tools section under ‘4. Travel: Forex Money and International Transfer’ for details.

Do you currently buy or need travel insurance, mobile insurance and/or breakdown cover?

Currently the best value for bundling this all together is the Nationwide FlexPlus Current Account, but you may choose to pay a bit more to bundle it with a more premium bills cashback account such as Natwest Reward Silver or Platinum. Otherwise, the Revolut app predominantly for travel money does allow you to buy device insurance and travel insurance for a specific period you need it.

2. Maximise Benefit: Interest, Rewards and Savings

Maximising Interest

To maximise your savings in a current account, there are several good options:

  1. Nationwide FlexDirect –
    • 5% AER interest for 12 months on balances up to £2500 (1% after – so a good switching account after)
    • Min. pay in £1000 per month (simply transfer in and out of another account)
  2. TSB Classic Plus
    • 5% AER interest on balances up to £1500
    • Min. pay in £500 per month (simply transfer in and out of another account)
  3. Tesco Current Account
    • 3% AER interest on balances up to £3000
    • Min. pay in £750 per month (simply transfer in and out of another account)
    • 3 Direct Debits required
Maximising Rewards

To add a little bit of bonus to your finances, some accounts can be worth having for the rewards, especially if you have one of their accounts already or if there is a switch reward to switch to it:

  1. Barclays Blue Rewards 
  2. Halifax Rewards
    • No fee, £3 reward every month
    • Min. pay in £750 per month (simply transfer in and out of another account)
    • 2 Direct Debits required
Maximising Savings

If you already have any current accounts with these banks and are close to their savings limits, it can make a lot of sense to have their instant access savings accounts and set up standing orders to them for the maximum saving amount:

  1. Nationwide Flex Regular Online Saver 
    • 5% AER for 12 months
    • Max you can add: £250 per month (set up standing order)
  2. Santander Regular eSaver
    • 3% AER for 12 months (or 5% if you have 1|2|3 World or Santander Select)
    • Max you can add: £200 per month (set up standing order)
  3. TSB Monthly Saver
    • 2% AER for 12 months
    • Max you can add: £250 per month (set up standing order)

3. Ensure You Get The Benefit

Qualifying for the benefits, rewards and cashback

To get many of these account benefits is sometimes criteria to meet. Here are the main ones and how to meet them:

  1. Pay-in transfers – sometimes you need £x paid into the account every month. Simply set up a standing order for this amount into the account every month, or in smaller batches if you need to. You can then set a standing order to send this amount back on the same day or a few days later.
  2. Direct Debits – you may need x number of direct debits, sometimes none. We recommend using ones you already have, whether that’s credit cards, bills or subscriptions. If you then need any extra, you may also choose to use our effective altruism Charity Direct Debits to donate to charity as well.
  3. Other Requirements – some accounts specify that you need to log in to internet or mobile banking within a period of time. Usually you will do this automatically anyway, as it’s far easier to manage the account online or on their app.
A Helping Hand

You may find you have started to acquire a number of accounts and that you need a system to track and manage them.

Don’t forget that you can use our Little Debits Bank Account Tracker (opens in Google Sheets, pw: littledebits)

Then, to monitor multiple bank accounts at once and see their balances, you may choose to sign up to a bank account aggregator such as:

  1. Money Dashboard – if you would like the option of your dashboard on both desktop browser and smartphone and lots of functionality
  2. Yoltif you want a purely app-based experience on a smartphone, with better graphics and UI
What Next?

Remember that once you hit your emergency fund total, you need to be thinking about long term saving unless you have another short term savings goal for a house deposit, car purchase or large outgoing.

This means now you might want to consider your pension and assess stocks and shares options in a low-cost investment platform. See our page Finance Tools for more info in ‘5. Investment Website and Ideas’