Savers could use current accounts for nest eggs and double their returns

 

 
Savers who do not have an old account paying a competitive interest rate could consider using a current account for savings.


As The Mail on Sunday revealed in August, people who want to build a nest egg could be better off leaving money in their bank current account as many pay higher rates than their savings counterparts.
Current accounts pay an average of 1.19 per cent credit interest, according to Moneyfacts – more than double the average instant-access account.
This is because banks are keen to attract customers to their current accounts so they can sell more lucrative products such as credit cards, insurance or investments. This is harder to do on savings accounts.

 

Nationwide’s FlexDirect current account pays 5 per cent on balances up to £2,500, but you would have to pay in £1,000 a month.

 

   

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Bank of Scotland and Lloyds’ Classic accounts with Vantage – an option for account holders who pay in at least £1,000 each month – pay tiered interest of 1.5 per cent from £1 to £999, 2 per cent from £1,000 to £2,999 and 3 per cent from £3,000 to £5,000.
Someone who keeps £5,000 of savings in one of these accounts for 12 months would earn £150 before tax.
Customers with bigger sums to invest may be better off with Santander’s 123 account, paying 3 per cent on balances between £3,000 and £20,000.