Question of the Week: Are any banks offering credit interest on current accounts?

Former_MSE_Lee

Q. Natwest's stopping paying in-credit interest on current accounts. I'm unable to find other banks offering credit interest unless you pay a minimum amount in each month. Is this the beginning of the end for interest on current accounts?

From Steve O by email

Martin's A:


Only for some. There are many decent current account interest offers at the moment, Santander offers £100 sign up bonus and 5% interest, Halifax Rewards via moneysupermarket gives £50 bonus and £5 a month. Read the full Best Bank Accounts guide

Yet as you say you need to pay money in, each month to qualify. So actually this is a tightening of conditions, with the 'pay money in' rule you needn't be in-credit and you can withdraw the cash whenever. It's effectively a way of ensuring it's your main account as you pay your salary into it - penalising those on lower salaries or who don't have regular incomes.

With the two accounts I mentioned both require you to pay in £1,000 a month (equiv to £15,000 salary), but there is a trick for the organised. If you're keeping over a £1,000 in the account, once a month withdraw it elsewhere then pay it back in and you'll fulfill the criteria (or do it in smaller tranches if you've less)

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Ebenezer_Screwj

Why do you want interest on a current account ? That is not what they are for, in any event you are not going to get much interest on any kind of savings unless you are prepared to tie the money up.

areader

One of the current accounts I have is from NatWest. I was always under the impression it paid a derisory amount of interest and I usually only have a small to zero balance in it. Therefore was not particuarly bothered about the interest being reduced to zero.

I have a Halifax reward current account and savings accounts for interest.

book12

Open a savings account instead. An ISA and regular savers are good. When their time is up, transfer them to an instant savings account.

rb10

Ebenezer_Screwj wrote: »

Why do you want interest on a current account ?

Because I keep a (albeit relatively small) amount of money in the account all the time, so it's nice to have that money working for me.

Because my Halifax Reward account gives me £75 a year gross for free.

Because it's there for the asking, with no catches, why not take it?

A more pertinent question would be 'why would you take a current account that doesn't pay credit interest, unless you spend most/all of the month overdrawn?'.

altocumulus

Standard Rate of interest will no longer be paid on Lloyds Current accounts with effect from 2 December 2010; unless one uses Vantage; up to £7,000 .... All this so that they can adjust their arrangements for overdraft and other fees ....