Can I Have Two Current Accounts?
The short answer is, yes, it is perfectly legal to have more than one current account. The real question is, is this the best way to handle your money?
Should you open multiple current accounts?
When thinking about opening more than one current account, you need to think carefully about what you are hoping to achieve. This will let you work out whether opening a second current account is the best choice, or whether some other type of account might be a better option.
You also need to pay attention to the rules of the current accounts you are looking to open. To get the full benefits of many current accounts, you will need to make a minimum monthly deposit and may need a minimum number of regular Direct Debits or standing orders coming out of the account.
When you might want two current accounts
Most current accounts only pay interest up to a certain deposit limit. You can usually keep more money than this in the account, you just won’t earn any interest on it.
As some current accounts offer very attractive interest rates, it can sometimes be better to keep your money in several different current accounts rather than placing your savings into an alternative type of savings account.
Which savings strategy makes the most sense for you will usually depend on how much you have in savings, what your savings goals are and what rates different types of accounts are offering at the time when you are planning your savings.
Types of savings accounts
There are various options for your savings. The following are four of the most common options used by UK savers.
Instant Access Savings Accounts
Also known as easy access savings accounts, these allow you to deposit and remove money whenever you like. They normally have higher deposit thresholds for earning interest than current accounts.
Instant access accounts don’t necessarily pay the best interest rates, but are good for those who want to save flexibly in the short term.
Notice Savings Accounts
Similar to instant access accounts, except you have to give notice when you want to withdraw funds. In exchange, you will normally earn a better rate of interest. Notice periods of 30, 60, 90 and 120 days are common.
Fixed Rate Bonds
Fixed rate bonds offer a set rate of interest for the life of the bond, in exchange for agreeing not to have access to the money for the bond term. Bonds usually last for 1, 2, 3 or 5 years. You may be allowed to withdraw the money early if necessary in exchange for paying a penalty fee.
ISAs
ISAs allow you to earn interest tax-free on your savings up to a deposit limit set by the UK government. For the 2017/18 tax year, this limit is £20,000 for a standard ISA or £4,128 for a junior ISA for under-18s.
Find the best current accounts on the market
Finding the best current account interest rates will depend on what various products and providers are offering at the time. The following three accounts currently offer some of the most competitive rates on the market.
Interest: 1.50% AER/1.49% gross (variable) on your entire balance up to £20,000.
Cashback: You can earn from 1-3% cashback on a variety of household bills, including your Santander mortgage payments and insurance premiums.
Account fee: £5 per month.
How many accounts can you have? You can have two Santander 123 current accounts, one personal and one joint account.
Interest: 3% AER interest paid monthly on balances up to £1,500.
Cashback: £5 per month if you have at least two Direct Debits coming out of the account. Another £5 per month if you use your debit card at least 20 times per month.
Account fee: No monthly fee.
How many accounts can you have? You can have two TSB classic plus accounts, if one of them is a joint account.
Nationwide FlexDirect current account
Interest: 5% AER (4.89% gross p.a.) interest on balances up to £2,500 for the first 12 months, then 1% gross p.a./AER (variable) after this.
Cashback: No cashback.
Account fee: No monthly fee.
How many accounts can you have? You can hold two Nationwide FlexDirect accounts, as long as one is a joint account.
