Best Current Accounts UK 2025

Types of Current Accounts in the UK

Before comparing specific accounts, it helps to understand the four main categories. Each serves a different purpose, and choosing the right type can save you money and frustration.

Standard Current Accounts

A standard current account is what most people use as their main bank account. It comes with a debit card, ability to receive salary payments, set up direct debits, and often an arranged overdraft facility. Most standard accounts are free to hold, provided you do not use the overdraft. High street banks including Barclays, Lloyds, NatWest, and HSBC all offer standard accounts. In 2025, competition from digital challengers has pushed high street banks to offer more perks — including switching bonuses, cashback on bills, and fee-free foreign spending — to retain customers.

Packaged Bank Accounts

Packaged accounts charge a monthly fee — typically between £10 and £25 — in exchange for a bundle of insurance and lifestyle benefits. Common inclusions are:

• Worldwide family travel insurance (often the most valuable benefit)
• Mobile phone insurance for accidental damage and theft
• Breakdown cover for UK and Europe
• Commission-free currency or travel money discounts
• Cashback on household bills

Examples include Lloyds Platinum (around £21/month), NatWest Rewards Platinum (£20/month), and Barclays Avios Rewards (£12/month for Avios points). They are worth considering if the combined value of the benefits exceeds the fee — but research suggests a significant proportion of packaged account holders never make use of their insurance benefits.

Student Current Accounts

Student accounts are designed for full-time university students and typically include an interest-free overdraft — often up to £1,500 to £3,000 — along with perks such as free railcards, gift vouchers, or cashback. Top student accounts in 2025 include HSBC Student Account (up to £3,000 0% overdraft), Santander 123 Student (free 4-year railcard worth £140+), and Nationwide FlexStudent (up to £3,000 0% overdraft). The key comparison point is the size and duration of the 0% overdraft, which can save students hundreds of pounds compared to being in an unarranged overdraft on a standard account.

Basic Bank Accounts

Basic bank accounts are for people who cannot access a standard account — typically due to a poor credit history, bankruptcy, or no previous UK banking relationship. They provide a debit card, the ability to receive salary and benefits, and direct debit capability, but no overdraft facility. All major high street banks are required by regulation to offer these accounts. They serve as an important entry point into the banking system and can help people rebuild their credit profile over time.

Top Switching Bonuses 2025

Bank switching bonuses are one of the most straightforward ways to earn extra cash in the UK. The Current Account Switching Service (CASS) makes the process safe and simple. Here are the leading offers available in early 2025 — note that offers are time-limited and conditions apply.

Tips to Maximise Switching Bonuses

• You can switch the same account multiple times if you open a new one — there is no minimum time you must hold an account before switching again
• Some banks (such as HSBC and First Direct) are in the same banking group — check group rules to confirm you qualify as a new customer
• Set up at least the minimum number of direct debits required (council tax, phone bill, and a utility all qualify) before the deadline
• Keep a record of when you switched and the bonus terms in case of any dispute

Best Interest Rates and Cashback in 2025

While most current accounts pay little or no interest, a handful of providers offer meaningful returns on positive balances or cashback on everyday spending. These can add up to hundreds of pounds per year for the right customer.

Best Interest-Paying Current Accounts

Chase UK: 1% Cashback

Chase UK (the UK arm of JPMorgan Chase) launched in 2021 and rapidly gained a following for its 1% cashback on everyday debit card spending, fee-free overseas transactions at the Mastercard rate, and an easy access linked savings account paying a competitive rate. The 1% cashback applies for the first 12 months and is capped at £15 per month (£180 per year). For a household spending £1,500/month on the card, that is the full £15 monthly cap — worth £180 per year for doing nothing different. Chase is FSCS-protected and holds a full UK banking licence.

Santander Edge and Edge Up

Santander Edge (£3/month) pays 1% cashback on household bills (council tax, energy, broadband) and 1% on supermarket shopping, capped at £10/month across both categories. It also pays 3.5% AER on balances up to £4,000. Edge Up (£5/month) raises the cashback cap to £15/month and the savings rate to 4.5% AER on up to £25,000. For households with large regular bills, the cashback alone can more than offset the monthly fee.

Digital Banks: Monzo, Starling, and Revolut

Digital banks have transformed UK personal banking since 2015. They offer slick apps, instant notifications, spending insights, and — crucially — no foreign transaction fees on their free tiers. Here is how the three main players compare.

Monzo in 2025

Monzo is the UK's largest digital bank by customer numbers, with over 10 million accounts. Its free account offers instant notifications, spending categorisation, savings pots paying up to 3.87% AER, and fee-free spending within monthly limits. Monzo Plus (£5/month) and Monzo Premium (£15/month) add higher fee-free foreign limits, credit score tracking, virtual cards, and travel insurance. Monzo is fully FSCS-protected and holds a UK banking licence.

Starling Bank in 2025

Starling Bank was the first UK digital bank to be profitable and is widely regarded as having the cleanest, most intuitive app of the major digital banks. Its free account has no caps on fee-free foreign spending, making it the best digital bank for frequent travellers on the free tier. Starling pays 3.25% AER on balances held in its main account (not a separate pot), which is unusual and valuable. It is also highly rated for customer service, consistently topping Which? satisfaction surveys.

Revolut: Important Caveats

Revolut operates on an e-money licence in the UK rather than a full banking licence (as of early 2026, its banking licence has been granted but not yet activated for UK customers). This means your Revolut balance is not covered by FSCS protection. Instead, Revolut is required to safeguard your funds in separate accounts at regulated banks — your money should be safe, but the £85,000 FSCS guarantee does not apply. Revolut has applied for and received a UK banking licence, and FSCS protection for UK customers is expected to become available once the licence is fully activated. For large balances, stick to Monzo or Starling in the meantime.

Overdraft Comparison 2025

Since the FCA's 2020 overdraft reforms, all banks must charge a simple annual interest rate on overdrafts rather than confusing daily fees. Rates have converged at around 39.9% EAR for most high street banks — but there are important exceptions.

Understanding the True Cost of an Overdraft

At 39.9% EAR, a £500 overdraft used for a full month costs approximately £16.25 in interest. That may seem modest, but if you are consistently £500 in your overdraft, you are paying around £195 per year — money that could be better used to build an emergency fund to break the cycle. If you regularly use an overdraft, consider:

• Switching to an account with a lower or personalised overdraft rate (Starling or Monzo)
• Using a 0% money transfer credit card to clear the overdraft balance
• Speaking to your bank about a short-term loan at a lower rate
• Using our Budget Calculator to identify surplus to pay down the overdraft

FSCS Protection: What You Need to Know

The Financial Services Compensation Scheme (FSCS) protects your deposits in authorised UK banks and building societies up to £85,000 per person per financial institution (£170,000 for joint accounts). If your bank fails, you receive your money back within 7 working days — automatically, with no claim needed for most depositors.

Key FSCS Facts

• The £85,000 limit applies per banking licence, not per brand name. Many high street brands share a licence with others in their group
• Halifax, Bank of Scotland, and Lloyds Bank are all part of Lloyds Banking Group — deposits across all three only receive one lot of £85,000 protection
• HSBC and First Direct share a banking licence — again, only one £85,000 limit between them
• NatWest and Royal Bank of Scotland share a licence (NatWest Group)
• Santander, Cahoot, and Cater Allen are all under one Santander licence
• Monzo, Starling, and Chase each hold separate licences — full £85,000 protection per account
• Revolut UK holds an e-money licence (not a banking licence as of early 2026) — FSCS does not apply

How to Switch Current Accounts in 7 Working Days

The Current Account Switching Service (CASS) is a free, bank-guaranteed service that makes switching your main bank account straightforward. Over 9 million switches have been completed since CASS launched in 2013.

Step-by-Step: How CASS Works

1. Choose your new account and apply online, in-branch, or via the app. Ensure you qualify for any switching bonus before applying
2. Request a switch — tell your new bank you want to switch using CASS. They will ask for your old bank's sort code and account number
3. Pick your switch date — the switch must take at least 7 working days from the date requested. You can choose a specific date to coincide with your salary payment date
4. The new bank handles everything — direct debits, standing orders, future bill payments, and any balance are moved automatically
5. Old account closes automatically on the switch date
6. Redirections in place for 3+ years — any payments sent to the old account after closure are automatically redirected to the new one

CASS Guarantee

All CASS switches are backed by a guarantee: if anything goes wrong — a direct debit bounces, a payment is delayed, you incur charges — the bank must refund any resulting fees and interest at no cost to you. This guarantee makes switching essentially risk-free for consumers.

Before You Switch: Checklist

• ✓ Note down all direct debits and standing orders for your own records
• ✓ Check you meet the new bank's income or pay-in requirements
• ✓ Confirm whether the new bank is in the same banking group as one you already use (may affect FSCS coverage)
• ✓ Check the switching bonus conditions carefully — deadline, minimum direct debits, pay-in amount
• ✓ Keep enough money in your old account until the switch completes

Frequently Asked Questions