Best bank accounts March 2023

There is a lot to think about when choosing a bank account, but choosing between the best bank accounts, to find the one that's right for you, will depend on your needs and how you manage your money.

To help choose the right one, think about the features that you use regularly. Do you want to make use of interest-free overdrafts, want to earn interest because you’re always in credit, or are you fed up with foreign transaction fees eating into your holiday spending money?

To help you pick the best bank account, we’ve broken down the different types of current accounts to help you pick the right one. 

Here’s everything you need to know about what is available.

Best bank accounts

The best bank accounts for overdrafts

If you regularly dip into the red on your current account, it is a good idea to choose a bank account that specialises in low overdraft rates.  

But, after the free or low-rate offer expires, borrowing via an overdraft is an expensive way to borrow with most standard current accounts charging almost 39% EAR when you use your overdraft.

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First Direct 1st current account (opens in new tab) | £250 interest-free overdraft (subject to status)

If you want a long-term interest-free overdraft this account could be your best option. Plus you can get paid £175 just for switching to it. 

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• £250 interest-free overdraft (subject to status) for as long as you have the account. Go over that amount though and you’ll be charged (0% EAR variable on the first £250, 39.9% EAR variable thereafter, giving a representative rate of 30.5% APR variable on an assumed arranged overdraft of £1,200)
• Switch to the First Direct 1st Account and you’ll receive £175. To qualify, you must use the Current Account Switch Service and pay in at least £1,000 within the first three months. This offer is only available to new First Direct customers, or HSBC customers who haven't opened an account since 1 January 2019. If you want to use First Direct, but do not want to switch accounts, you could still benefit from a £20 welcome bonus if you open a current account.
• Get access to a 3.5% regular saver account (fixed for 12 months and you must save from £25 to £300. If you save less than £300 in any given month, you can carry over the difference to the following month. The maximum you can save in a year is £3,600 per year.

The best bank accounts to earn interest

If you keep a healthy balance in your current account, the interest rates available on these current accounts are decent compared to some of the best savings accounts on the market.

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Nationwide FlexDirect (opens in new tab)  | 5% interest on up to £1,500

This current account offers the highest interest with new customers able to earn 5% on cash balances up to £1,500 for the first 12 months, but after that, the rate will drop to 0.25%

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• Earn 5% AER interest fixed for a year (0.25% AER variable after) if you pay at least £1,000 per month into your account. 
• An interest-free overdraft of up to £2,750 for the first year (subject to status). Arranged overdraft years two plus: 39.9% EAR variable

It is worth noting that the rates only apply to balances up to a certain limit and the deals may also only last for one year. If you have more to save, then it is worth considering an account with linked savings.

The best bank account for linked savings

There are several bank accounts available at the moment that come with a linked savings account with an attractive interest rate.

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First Direct 1st current account (opens in new tab) | 7% regular saving account

Pays 7% if you pay into it from £25 to £300 per month. Fixed for 12 months.

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• £250 interest-free overdraft (subject to status) for as long as you have the account. Go over that amount though and you’ll be charged (0% EAR variable on the first £250, 39.9% EAR variable thereafter, giving a representative rate of 30.5% APR variable on an assumed arranged overdraft of £1,200)
• Get access to a 7% regular saver account (fixed for 12 months) and you must save from £25 to £300. If you save less than £300 in any given month, you can carry over the difference to the following month. The maximum you can save in a year is £3,600 per year.

The best bank account to use overseas

If you travel regularly, you may want a bank account that offers the best exchange rates and zero or low fees for foreign usage. Using the wrong card could mean you pay around 3% every time you use your card abroad. Here are the best bank accounts if you plan to use your bank card when travelling.

The best bank account for cashback

There are some current accounts that will pay you cashback on your spending and direct debits. Here is the best available right now:

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Chase current account (opens in new tab) | 1% cashback on most purchases in the first year 

You can get 1% cashback on most of your purchases in the UK and abroad for the first year.  On top of this, you get 3% interest in the linked savings account and 5% interest on the money you save by rounding up your spending to the nearest £1.

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Santander’s 123 Lite account (opens in new tab) | £15 per month back on bills

 For £3 a month you get varying rates of cashback on different household bills. Cashback is capped at £5 a month in each tier so you’ll earn a maximum of £15 a month. 

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To get the cashback you have to pay in £500 a month, have at least two direct debits set up and use digital banking at least once every three months.

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Nationwide (opens in new tab)| 5% cashback on supermarket shopping

All NAtionwide current accounts can earn 5% cashback on the money you spend at supermarkets, capped at £10 in a calendar month, until 30th April 2023.

The best bank account switching bonus

Take a look at our article on the latest switching offers to find the best deals available now.

It’s a great time to get a new bank account. Banks are eager to attract new current account customers so there are plenty of tempting cashback deals available. But don’t just choose your current account based on the free cash. You want a bank account that works well for you, otherwise, you’ll be switching again in a few months.

How to pick the best bank account

Before opening a new bank account, ask yourself what you want from it and choose one that ticks most of the boxes. Here are some things to consider:

• Do you need an overdraft facility?
• How often do you need to go into a branch?
• Would you like a linked savings account?
• Do you want to pay for extras such as travel insurance or breakdown cover?
• Would you like to earn cashback on your spending?
• Do you want to get paid to switch?