High interest rates on current accounts

RG2015

Why do some banks offer high interest rates on current accounts?

I have a number of these and treat them like savings accounts. I satisfy all of the conditions and take the money. There is even a website showing how to open and maintain multiple accounts and hence maximise interest received. ( https://www.bankaccountsavings.co.uk/ )

The banks know that many thousands of people do this so what is in it for them?

EachPenny

Vanity, and loss leading marketing?

More new current account customers make the bank look better, especially when the switching tables are published and the winners and losers identified. I'd guess that some senior bank officials also have 'new current account customers' as a factor in their bonus calculations.

A slightly less cynical view is that attracting a new customer to the bank means more opportunities to cross-sell more lucrative products like insurance and credit cards.

The banks have to put up with the customers who join to take advantage of the high interest rates, but stubbornly resist the temptation to overpay for other products.

The T&C's (amount you earn interest on, number of DD's etc) act as a brake on how much the banks have to pay out to savvy customers.

TheShape

Most people are not MSE forum regulars with fifteen current accounts taking advantage of the best rates/perks/offers.

Far more people who will open a current account with a good rate and still have it long after that rate has dropped to nothing. They might then stick with that bank for their mortgage, a credit card and perhaps some horrendously expensive insurance products.