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Current accounts are not a qualifying product; however, compare current accounts now and find the right one for you.
What is a current account?
A current account is a bank or building society account that allows you to manage your spending on a day-to-day basis. Your salary can be paid into it, and direct debits and standing orders can be set up. Some current accounts pay interest on balances, offer cashback on spending and many come with an overdraft facility.
Frequently asked questions
Can I get a current account?
Any legal UK resident over the age of 16 can get a current account. Some banks won’t accept you until you’re 18, unless you have your parents’ approval. But there are banks that will happily provide you with basic banking facilities, although these types of accounts can be more limited in their services.
You might need to undergo a credit check, as most current accounts come with an automatic overdraft that might be cut if you have a poor credit history. Here are some tips for improving your credit score. Obviously, you’ll have to prove your identity and provide an address to open a current account.
What should I consider before comparing current accounts?
It’s worth thinking about how you plan to use your current account. Consider your money flow - what amounts do you estimate putting in and taking out each month? Will you need an overdraft? Do you move money often? These sorts of things will help you narrow down your options and help you find the current account with the right features for your lifestyle.
What type of current account is right for me?
- Standard current accounts provide many useful services. You can have your salary paid directly into a current account, settle bills or set up direct debits. These accounts usually provide a debit card that allows you to make cash withdrawals and to pay for items.
- Packaged accounts are aimed at customers looking for additional extras on top of what’s available with a standard account. Additional extras such as travel insurance, mobile phone insurance, breakdown cover and cashback are typically available.
However, there are often monthly or annual fees associated with this type of account, so weigh up the benefits versus any fees and make sure it works for you.
- Student accounts aim to meet the needs of those studying at college or university and typically offer interest-free overdrafts.
- Graduate accounts are specifically designed for graduates to help pay down overdrafts built up while at university. They normally offer interest-free overdrafts for up to three years.
- Basic bank accounts are available to anyone. They tend to suit people who are unable to qualify for a standard account, perhaps because they have a low credit score or have only recently moved to the UK.
How much should I pay into a current account?
Generally there is not advised 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 still make direct debit or standing order payments.
Will I be charged for using a current account?
Unless you slip into an overdraft that hasn’t been pre-agreed with your bank or building society, then you often won’t be charged for having a current account (unless it is 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 agreed 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.
What fees should I consider when comparing current accounts?
- Interest rates (AER): The Annual Equivalent Rate (AER) shows the rate of interest you would receive on any balances left in the account over a year - - and can be paid annually or monthly.
- Account fee: This is how much you’ll be charged on a monthly or yearly basis for using the account.
- Overdraft charges: You could be charged hefty penalties if you exceed your agreed overdraft limit. If you do often find yourself overdrawn at the end of each month, pay close attention to any related charges.
What benefits come with a current account?
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.
What benefits can I get by switching current accounts?
Banks are always competing for your business, so there’s usually a huge number of benefits and rewards you could get with certain current accounts. This includes accounts with fee-free overdrafts.
It’s worth being aware that, when you switch current accounts to receive certain rewards there might be a commitment to pay in a certain amount each month and/or set up a number of direct debits from the account - this is to encourage you to use it as your main bank account.
What other benefits are there?
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. Benefits to look for are ones that will save you money, as well going for a bank with a reputation for strong customer service.
How do I compare?
The easiest way to start is by comparing some of our most competitive deals now to see if you can start saving.