High interest bank accounts are making a comeback. Here's how to earn up to 5% in a current account
With interest rates rising fast, savings providers are upping their rates like there's no tomorrow. As of February 2026, competitive easy-access savings accounts are paying up to 4.55% AER (variable). One-year fixed-rate bonds have seen some adjustments following recent base rate cuts but still offer attractive guaranteed returns of around 4.12% to 4.35% for those happy to lock their money away. Following years of rock-bottom interest rates, deals like these represent a huge, refreshing change for savers.
Yet it's not just savings accounts that are competing for saver's cash. A number of bank accounts have started to offer headline-grabbing savings rates in an effort to attract new customers. Headline rates on current accounts remain strong, with Nationwide offering 5% AER on balances up to £1,500 for the first year. Alternatively, Barclays provides a competitive 4.21% AER on balances up to £5,000 for Blue Rewards customers.
So should you stash your savings in a bank account? Or is it best to stick with normal savings? Let's explore.
Keeping cash in a bank account (a brief history)
In years gone by, keeping a large amount of cash in a current account was best avoided. That's because the interest rates on offer were often miserly.
Instead, savers were better off transferring the majority of their cash to a competitive savings account, keeping only a small proportion in their current account for everyday spends.
Yet over the past few years growing competition for customers has forced banks to re-think their offerings. Some banks began offering cashback on bills. Others shamelessly bribed new customers with cold, hard cash for switching accounts. Meanwhile, some banks focused on headline-grabbing interest rates. These are known as 'high interest bank accounts.'
It's fair to say that the number of high interest bank accounts had diminished somewhat. Yet, recently they've come back with a bang.
What high interest bank accounts are available right now?
If you're looking to max the interest on your cash, now is a great time to take action. Not only have rates on normal savings accounts increased, but there are also a number of high interest bank accounts paying generous rates of interest. Be warned though, these accounts typically aren't as flexible as normal savings accounts, and some will only allow you to earn interest on small sums.
Here's the lowdown of some higher interest bank accounts out there right now, especially from historically popular banking names:
1. Barclays - 4.21% AER variable
The Barclays Rainy Day Saver account pays 4.21% AER variable on up to £5,000. Anything above £5,000 earns just 0.95%.
It's a savings account, but in order to open it, you must have a Barclays bank account and sign up to its Blue Rewards scheme.
In order to be a member of this scheme, you must pay in at least £800 per month. There's also a monthly £5 fee to join Blue Rewards, but this will be waived if you pay out two direct debits from your Barclays current account each month.
2. Nationwide - 5% AER fixed for 1yr
The Nationwide FlexDirect account continues to pay 5% AER fixed interest on balances up to £1,500 for the first 12 months. You can earn this as long as you haven't had the account before. Above this, you earn just 0.25%.
To keep the account you must pay in at least £1,000 per month. While switching bonuses have been volatile, Nationwide is currently offering new customers a £175 incentive for switching to Nationwide.
3. Chase - 4.5% AER variable
The Chase Boost easy access offer is 4.5% AER variable with their boosted saver account, which includes a fixed boost of 2.25% AER on top of the standard saver variable rate for 12 months.
This rate applies to balances up to £3 million, offering much higher capacity than traditional high-interest current accounts. Though all savers should take care if exceeding the £85,000 FSCS savings safety limit.
While its new rate is still below the market-leading deals, it's worth knowing that Chase's bank account is a decent all-rounder. Its debit card doesn't charge for overseas spending, while the account offers 1% cashback on spending for a year.
Bank account or savings account: which wins?
In the 2026 market, you shouldn't accept anything less than 4% for easy-access savings. While current accounts like Nationwide offer higher headline rates (5%), they are often capped at small balances, whereas dedicated savings accounts like Chase (4.5%) allow you to earn high interest on much larger sums.
For a list of the top easy-access accounts available right now, take a look at our best savings accounts guide.
Don't forget tax on savings interest...
For the 2025/2026 tax year, remember that your Personal Savings Allowance (PSA) remains frozen at £1,000 for basic-rate taxpayers and £500 for higher-rate taxpayers. With interest rates sitting around 4% to 5%, it is much easier to exceed these limits; for example, a higher-rate taxpayer with £10,000 in a 5% account will hit their £500 limit exactly.
Please note that tax treatment depends on your individual circumstances and may change in future. The content in this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence.