How to Compare UK Current Account Fees Properly
Current account fees are easiest to compare when every cost is converted into annual pounds. Monthly account fees, overdraft interest, overseas card charges and packaged-account premiums should sit in one ledger, with only realistic rewards deducted.
Annualise the monthly account fee first
Multiply any monthly account fee by 12 before comparing it with a one-off reward. NatWest Reward currently charges £2 a month, which is £24 a year. Club Lloyds charges £5 a month but refunds that fee in months when at least £2,000 is paid in, so the real annual cost depends on how often you meet the threshold.
Packaged accounts can cost much more. Lloyds Silver currently charges £11.50 a month, or £138 a year. Platinum costs £22.50 a month, or £270 a year. Club versions can also carry the separate £5 Club fee when its refund condition is not met.
A bank that advertises a £200 switch incentive can still be more expensive after the first year. Put the bonus in a first-year-only column and keep the normal annual fee in a recurring column so the promotion does not hide long-term cost. If the fee is refundable, record the number of months you realistically expect to meet the condition. Twelve perfect months should not be assumed when your income or pay-in pattern is irregular.
Add overdraft cost using your own balance and duration
Overdraft interest can dominate account fees for regular borrowers. Use the same example across providers, such as £500 for seven days and £500 for 30 days. Starling currently publishes an illustrative £5.77 cost for £500 over 30 days at its representative comparison rate, while Lloyds Club shows £8.50 for £500 over 30 days under its current example.
A customer who never uses an overdraft can record £0 for this line. A customer who spends ten days a month overdrawn should estimate that repeated annual cost rather than use a single one-off example.
Also record any interest-free buffer. Club Lloyds currently shows a £100 interest-free amount in its representative overdraft illustration. A small buffer can matter more than a slightly lower EAR for customers who dip only a few pounds below zero. Repeat the same calculation for a stressful month as well as an average one. A provider that looks cheap at £100 for three days can become expensive when the balance reaches £800 for several weeks.
Add travel, cash and special-service charges only if you use them
Foreign card fees can create a large annual difference for frequent travellers. If an account charges 2.99% and you spend £2,000 abroad, the fee alone is about £59.80. An account with no issuer foreign purchase fee can therefore justify a higher domestic account fee for the right customer.
Cash deposits, CHAPS payments, replacement documents or specialist international transfers can also carry charges. Do not clutter the comparison with fees you will never trigger, but do include any cost tied to a feature you use several times a year.
The goal is a personal annual cost, not a complete tariff reproduction. Use the provider tariff to identify relevant fees, then calculate them using your own expected number and size of transactions. Keep a separate line for charges imposed by third parties, such as overseas ATM operators. Those costs may still occur even when the UK bank advertises fee-free foreign cash withdrawals.
Subtract rewards only after testing the conditions
NatWest Reward currently offers up to £5 a month in Rewards while charging a £2 monthly fee. The headline net can look like £36 a year, but only if you meet the Direct Debit and app-login conditions in every month and the eligible payments remain in place.
Club Lloyds can refund its £5 monthly fee when £2,000 or more is paid in each calendar month and also offers a lifestyle benefit. If your normal income already meets the threshold, the fee can be effectively zero. If you need to move money artificially every month and risk forgetting, assign a probability-adjusted value rather than assuming perfect execution.
Cashback from retailer offers should be based on planned spending. Never create purchases merely to make the account look profitable. The most reliable reward is one earned by behaviour that would happen anyway. If a reward depends on several Direct Debits or repeated card use, check that those transactions are normal for you. The cost of creating artificial activity can exceed the reward and makes the comparison less durable.
Compare year one and year two separately
Year one can contain switch bonuses, introductory rewards or temporary fee waivers. Year two often contains only the normal account economics. This is why two separate columns are essential.
Example: Account A has no monthly fee and pays a £200 switch bonus. Account B has a £5 monthly fee but refunds it when you meet a £2,000 pay-in and gives a lifestyle benefit you value at £60. If you naturally meet the threshold, Account B can be low-cost long term. If you do not, its annual fee can absorb the whole £60 benefit.
After the first year, remove the switching bonus and compare again. If the account only wins because of the one-off cash, decide whether the inconvenience of moving again is acceptable before switching in the first place. Add a third column if a packaged benefit or promotional rate changes on a known future date. This prevents a good first-year result from hiding a weaker cost structure once introductory terms expire.
BankOfferScout editorial view
The cleanest fee comparison uses one usage profile across every candidate. If the assumptions change from account to account, the result becomes a marketing comparison rather than a cost comparison.
Our second test is resilience: would the choice still make sense after allowing for situational charges hidden behind a low headline fee? That question often exposes the difference between an attractive headline and durable value. For How to Compare Current Account Fees, apply it to the annual total of recurring and event-driven charges rather than a generic best-case example.
The editorial test for How to Compare Current Account Fees is whether the choice still works under normal behaviour. The last step is freshness. Confirm monthly fees, transaction charges, waivers and thresholds on the provider tariff, eligibility page and current account terms; where a scheme, tax or regulatory rule matters, use the relevant payment-system or regulatory source as well. The final application, transfer or switch should always use current information.
Sources and related guides
Fee examples were checked on 30 September 2026 against current NatWest, Lloyds and Starling pages. Future updates should recheck fees, refund thresholds, overdraft examples and overseas charges separately. Reward values should be based on actual qualifying behaviour rather than theoretical maximums.
- NatWest - Reward account
- Lloyds - Club Lloyds
- Lloyds - current account comparison
- Starling - current account comparison
Related Guides: Future updates should verify the provider tariff, monthly-fee refund conditions, current overdraft examples and any travel-fee changes. Do not reuse old worked examples after a rate or threshold changes. The arithmetic should always be recalculated from the live figure so the text and examples remain internally consistent.