Current accounts paying interest. Are they worth it?

Eco_Miser

RG2015 said:

D3xt3r5L4b said:

What about Lloyd’s and the interest rates they currently offer?

Good question, and Bank of Scotland too which has the same deal although both have additional DD/pay in requirements.

Club Lloyds / BOS Vantage 
£4,000 @ 0.99% = £39.60
£1,000 @ 1.98% = £19.80
Total Interest = £59.40

Compared with Marcus
£5,000 @ 1.20% = £60.00

So I'm paying 60p for the Club Lloyds Reward. Just about worth it.I also use the account to feed 3 RSs.
Overall, I think keeping my existing current accounts and the money merry-go-round is worth it, but I would think more than twice before opening new accounts.

Bobblehat said:

One difference between the choice of those two that might be worth mentioning ….. I am looking for a new feeder account for multiple RS's (as Charter EA is dropping), Lloyds CA (or BOS) could be used to set up automatic SO's … Marcus can't, I'd have to do them manually each month …. yuck! CL/BOS needs 2 DD's though.

Worse than that. Marcus will only send money to your linked account, so you'd still need a current account to feed the RSs.

sparky0138

phillw said:

TSB has always been worth it, if you didn't open two accounts when they had no direct debit requirements then you're not really in the game.

Is this for the Classic Plus? Have they changed the direct debit requirement recently? It's just that someone pointed out on the Quidco/TSB thread that if the new Classic accounts that people opened didn't automatically merge with your original account, it was possible to upgrade them to Plus, even if you already have two (which I do, from way back when).

So I logged in yesterday to upgrade and I read through the requirements and there was no mention of direct debits needed for interest. I'd completely forgotten they'd added it as a requirement until I was reminded of it in your post.

Yorkshire_Pud

I thought the two DD requirement TSB Classic Plus was for switch offers and to get the £5 per month Cashback (no longer available), not to qualify for account interest?

Ive checked and there is no requirement to have DDs to get interest.

Poor_Leno

Every penny of spare money I have is in interest paying accounts not lower than 1.25%.  (Well, I do have a little amount in an NS&I direct saver @ 1% but not its not much).  If I happened to have a spare £1000 not earning anything, I'd definitely open up the virgin account for 2%.  Having given it brief thought it wouldn't be worth my while to even switch out £1,000 from my marcus account into the Virgin one.  I'd be gaining about 50p or something over the month.  I'd rather do a couple of quick surveys on Qmee I think.  But for anyone with a grand sat anywhere earning naff all, its definitely worth it

gsmh

You asked what we thought, I'd say it is absolutely not worth it. There are more important things in life than jumping through hoops to grab a few pounds over the course of a year. For me it is much more important that my money is used for ethical purposes, not to fund the fossil fuel industry or anything else that contributes to global warming. I bank with Triodos and pay £3 a month for the privilege. Triodos is completely transparent about who it lends to and lists the beneficiaries on its web site. I would rather bank with Triodos and forgo a pitiful amount of interest or a switching bonus. I know this point of view is unpopular here, but there you go.

schiff

All the current accounts that I have ever had (since I 'found' MSE anyway!) were started for a reason:
They paid interest - some 5% when I started, now only 1% - 1.2%.
They gave access to high interest regular savers - 6% was the best, I've still got a couple going at 5% but the future prospects look like 3% and under.
They offered a switching bonus around £150.
Apart from the switched accounts I've still got them - balance £2 or so, earning nothing, except TSB, Santander, Lloyds! They have been very remunerative but it has changed a lot.
And they have all been useful, using their minimum monthly deposit requirements to feed RS SOs.

[Deleted User]

schiff said:

All the current accounts that I have ever had (since I 'found' MSE anyway!) were started for a reason:
They paid interest - some 5% when I started, now only 1% - 1.2%.
They gave access to high interest regular savers - 6% was the best, I've still got a couple going at 5% but the future prospects look like 3% and under.
They offered a switching bonus around £150.
Apart from the switched accounts I've still got them - balance £2 or so, earning nothing! They have been very remunerative but it has changed a lot.
And they have all been useful, using their minimum monthly deposit requirements to feed RS SOs.

This is why I have a few too. 

Although judging by the interest rates you’ve said I think I probably came to this a bit later than you .

colsten

To me, there is no question whether interest paying current accounts were, and are, worth it. Some will continue to be worth it for me, some I have ditched (i.e. switched for a bonus) some time ago. For people only starting out now, the prospects are much less attractive, not least because the max number of accounts of the same type are now widely enforced.

Similar applies to the rewards and cashback accounts.

RG2015

I had one NatWest current account started in 1973 until 2014 when I opened a Santander 123 for the 3% up to £20k and the cashback. Others quickly followed for collateral benefits.

Nationwide Flexdirect, NatWest Rewards, First Direct, HSBC Advance, Tesco Bank and TSB Classic Plus. I was tempted by Virgin Money's 2% but then thought really, £8 extra per year? Enough is enough. I doubt that I will ever open another current account.

robatwork

Ah the 3% on Santander 20k was something worthwhile. Inflation wasn't that much more than it is today.

I don't bother moving money around much now as the absolute numbers are frankly derisory. My esaver just went down to 0.05%. To put that into numbers, that's 50p interest on £1000 over the year.  0.14 pence per day.