Santander’s 123 current account has been many peoples favourite choice for a current account over the past few years. The bank account offered great cash back and interest rates. Unfortunately, the people running Santander have decided to increase the monthly account fee from £2 to £5 effective this month. Whilst I do still believe Santander offers good value as seen by a recent post I did showing how much you need in the account to break even, it can no more said to be the outright best bank for your money.

In 2016, there is no outright favourite current account like Santander has been over the few past. If you are comfortable keeping your money in one place and want the least hassle, the Santander 123 current account may still be the best account for you.

But if you want the highest interest rate, and don’t mind having multiple bank accounts, it would probably be best to split your money into several different bank accounts.

If you have £20,000 in a Santander 123 current account for instance which is the limit you get interest up to, you will receive £35 a month after tax.
Due to 20% tax, you earn 2.4% interest (3% * 0.8) which gets you £40 a month. Subtracting the monthly £5 fee you get £35.

On the other hand, if you put your £20,000 across the top tier of accounts – Nationwide FlexDirect Account and TSB Classic Plus Account at 5%, Lloyds current account at 4% and Bank of Scotland / Tesco current account at 3% (but with no fee as with Santander) you get £49.33 after tax. That’s £14 extra a month!

By splitting your money across several accounts, you can get an extra £14 a month. If you really need the extra money, getting several bank accounts could be a good way to go.

The interest you receive on the mentioned bank accounts is as follows:

• Nationwide FlexDirect Account -5% interest on balances up to £2,500.
• TSB Classic Plus Account – 5% interest on balances up to £2,000.
• Lloyds current account – Earn interest on your whole balance up to £5,000. If your balance is between £1 to £1,999.99, you’ll earn 1% interest, if your balance is between £2,000 to £3,999.99, you’ll earn 2% interest and if your balance is between £4,000 to £5,000, you’ll earn 4% interest.
• Bank of Scotland – 3% interest on balances between £3,000 – £5,000.
• Tesco current account – 3% Interest on balances up to £3,000.
• Santander 123 current  – 3% interest on balances up to £20,000.

(Please note that from April 6th 2016, the first £1000 of interest received is tax free).