Compare current accounts

Typically, there’s no set amount. However, some banks might insist that you pay a minimum amount into your account each month from your wages, benefits or other means. If you can’t do this, or a credit check means you’re refused a full current account, then consider a basic bank account.   
 
A basic account will give you much the same service, but without any of the frills and you won’t be given access to credit (often in the form of an overdraft). You can still have a debit card, though, so you can make direct debit or standing order payments. 

Switching current accounts allows you to make the most of the competitive banking market. Account providers are always trying to lure new customers by offering attractive interest rates, which fall through the floor after the first year or two. By switching accounts regularly, you can maintain a stronger interest rate, as well as make the most of other benefits and rewards. For current accounts, it really does pay to switch!

Thanks to the Current Account Switch Guarantee, most banks or building societies will handle the switch between them, transferring you existing money from your old account to your new one, before closing your old accounts. They should also switch all of your direct debits and standing orders to your new account for you automatically, as well as updating your employer on the account to pay your salary.

If either your old or new account provider are not signed up to the Current Account Switch Guarantee, you may need to get in contact with them yourself, to organise the switch manually.

You can have as many current accounts as you’d like. In fact, it’s often very useful to have more than one. A second current account can offer a useful back-up option, if your main account has issues or its security is compromised. Some people also use multiple accounts for different types of bills. For example, you may want a joint current account for financial responsibilities you share with a partner, as well as an individual one for managing your remaining income and personal bills.

You often won’t be charged for having a current account (unless it's a packaged account that comes with an agreed monthly fee). But do check, because each account will have different terms. Withdrawals from cash machines, over-the-counter and online or contactless payments are often free of charge. However, you can sometimes get charged fees in cash machines that are privately owned.

If you’re overseas, then you’ll typically get charged to withdraw money - and your bank’s exchange rate can also prove painful. You should try to avoid using your current account’s debit card to take out cash abroad. Find other solutions, such as pre-paid cards or currency. Some credit cards even have great offers for overseas travel. Find out more about  credit cards you can use abroad.

Unless you have an interest-free overdraft, you’ll almost certainly have to pay for an overdraft with a current account, and it can cost more than you might think. Make sure you check the terms and conditions for any overdraft charges.

People facing financial difficulties because of coronavirus had until 31 October 2020 to ask for an interest-free overdraft of up to £500 for three months. They were allowed to request this to be extended for another three months if they were still having problems.

Banks are no longer required to offer this support, but some are still offering help, including allowing interest-free overdraft periods or capping overdraft interest charges.

Remember, if the interest rate is temporarily reduced on your overdraft, it'll return to the normal rate after any temporary period ends.

If you’re currently having difficulties because of the pandemic, you should approach your bank or building society for tailored support.

Please note: This information was correct at the time of publication on 18 February 2021 but, because of the impact of COVID-19, things are changing rapidly. We aim to keep this page updated, but please check with your bank directly to confirm any details.

If your current account offers a reward in the form of a cash payment, this is not covered under your Personal Savings Allowance (PSA), which means these rewards will be taxable. If the account offers rewards in the form of discounts, these are not subject to tax. Account providers will often take this into account, with the gross reward being higher than the advertised figure, which is what’s actually paid to you, after tax.

If you’re a higher-rate, or additional-rate, taxpayer, you may be required to pay more tax on your rewards. Depending on your personal tax rate, along with the amount of interest you earn, interest payments may or may not be tax-free.

It would be hard to function in the modern world without a current account, and you might find it difficult to set up many of the things you take for granted. This includes cheap broadband deals, a phone contract and all kinds of other simple pleasures. 

You can receive money electronically, set up standing orders and make payments to other people over the phone and online. Plus, you can often keep an eye on your balance through mobile apps. 

If you decided to take out a packaged account, the benefits are wide ranging and include: travel insurance, cashback, breakdown cover for your car and special offers with the bank’s partner companies. Other benefits might include protection from online fraud cover, which can be a lifesaver should the worst happen. 
 
When you’re comparing current accounts, look through the offer details very carefully. Look for benefits that will save you money and consider opting for a bank with a reputation for strong customer service. 

App-based bank accounts are becoming increasingly popular in the UK. These are different to the apps on offer from the traditional banks, which offer you greater visibility of your normal account and finances. App-based banks don’t have high-street branches for you to visit, with all the customer service instead found in the app. It creates a one-stop-shop for all your banking needs, with a 24/7 personal banking assistant in your pocket. 
 
Even though your bank account is purely in the app, some app-based banks still allow you to deposit cash and cheques into your account. The process may vary from one account provider to the next, and some may not allow you to do this at all, so it’s important to check before opening an account. 
 
As well as all the traditional services a bank offers, banking with an app gives you plenty of other useful features. You can set up spending notifications, allowing you to become more aware of your money and prevent you from going overdrawn. It also offers beneficial saving options, such as the ability to ring-fence money to protect your savings, or to freeze your account temporarily when your balance is low. These features allow you to be more flexible with your money, giving you instant access at any time of the day. 
 
It’s important to note that many traditional banks are beginning to offer similar services to app-based bank accounts, improving their digital services considerably to keep up. 

If you’re looking for the best current account, start by comparing the latest deals. Compare with us now, to see if you can start saving.