5 ways to make the most of your current account

Had the same current account since your student days? Make your money work harder by finding the right current account for you, with these hints and tips.

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1. Keep an eye out for top rates

Banks these days are offering eye-catching rates on some of their current accounts. Some, for example, pay a sparkling 3% or even 5% on credit balances of up to a certain amount – perhaps £2,000 or £3,000 or even £20,000. It's why more people are using their current account as an alternative savings account.

"It is the only way to get vaguely decent interest!"

2. Make sure you qualify

High-interest current accounts don't always suit everyone - most, for example, insist that you pay a minimum amount into the account each month. This could be £500, but climbs to £1,000 in some cases.

You might also have to set up a number of direct debits from the account. It's a bank's way of making sure you are actually using the current account as a current account, and not just stashing your cash for a rainy day.

"Current accounts can be very different and you need switch to one that suits you."

3. Pay attention to the small print

Some banks pay tiered rates. For example, you might receive 1.5% on balances from £1 to £999.99, 2% between £1,000 and £2,999.99 and 3% on balances between £3,000 and £4,999.99. Any money above the top threshold usually earns interest at a low or a zero rate.

The high interest might be short lived, too - an eye-catching rate of 5% might only last for 12 months. And don't forget to check whether there's a monthly fee, which would eat into the money you're making.

4. Enjoy the benefits

There can be restrictions, but there are plenty of perks too, alongside juicy rates of interest.

For instance, many accounts offer preferential deals on overdrafts, loans and mortgages, credit cards and savings accounts. You might also earn cashback on household spending, getting 1% cashback on water bills and council tax, 2% on gas and electricity bills, and 3% on phone, broadband and TV packages.

"We don't have annual travel insurance with anyone, so I guess a perk like that could be valuable."

5. Beat the stress of switching

Many people are put off switching current accounts because they believe the process to be lengthy and complex, but it is now a lot quicker and easier, thanks to the seven-day switching initiative endorsed by the government and the bulk of the banking sector. A switch takes seven working days and your new bank takes care of everything. Plus, any wrongly applied charges will be refunded.

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