Two thirds of UK current accounts pay a paltry 1 per cent interest, or less, to those who stay in the black, according to a recent report from Moneyexpert.com, a financial website.

But you needn’t settle for such low rates. For people likely to slip into the red, there are manageable overdraft options, too. But most accounts have caveats, such as minimum monthly payments.

For those in the black, the Halifax High Interest Current Account, pays 5 per cent interest. “This is higher than many savings accounts,” says Michelle Slade, of Moneyfacts, the price-comparison website. But if you fail to deposit the minimum £1,000 a month,

the rate drops to 0.1 per

cent. Stray into the red and the charge is 18.9 per cent

for authorised overdraft use

and 29.8 per cent for unauthorised use.

Unusually, you can have it both ways with the Alliance & Leicester Premier Direct Account. It pays a handsome 4.98 per cent on balances in credit, so long as you pay in £500 a month. An overdraft costs nothing for the first year; thereafter it costs 5.9 per cent.

Some building societies offer good rates. Coventry’s First account pays 4.98 per cent, but you have to pay in at least £1,000 a month. Nationwide’s Flex Account clocks in at 4.25 per cent.

As ever, the big five banks are the worst offenders, brimming with low-paying current accounts, such as Barclays at 0.1 per cent, and HSBC at 0.1 to 0.25 per cent. Lloyds TSB Classic Plus account pays 3.93 per cent, if you deposit more than £1,000 a month, but pay in less and you get just 0.1 per cent.

If spending is your thing, the Halifax Moneyback account repays 1 per cent of the first £10,000 you spend on debit card purchases. For

a fee of £4 a month, the Barclays First Additions Account gives you discounts

in certain shops, as well as access to a legal helpline.

ZOË STRIMPEL