Current account deals
Almost every adult in the UK has a right to a bank account, but not all accounts are equal. The best current accounts offer features like interest-free overdrafts, free use abroad, cashback on bills, high interest on positive balances and some will even pay you to switch. But all current accounts - even basic ones - let you carry out everyday banking transactions. These include:
Having your salary or other income paid in
Withdrawing cash
Making payments in shops and online
Setting up direct debits
Setting up standing orders
Transferring cash to and from friends
Outside those essentials, the current account features you can get are based on how much you can pay in each month and your credit history. You should also think about which features you value the most when choosing a current account.
It's completely normal to worry about your money, but the good news is that most banks and building societies are covered by the Financial Services Compensation Scheme (FSCS). This is an independent services that covers up to £120,000 (per person and per institution) if your bank goes bust.
If you have more than this amount in one account, then it's worth spreading the money to another account to ensure you are protected.
To make sure your money is covered by the scheme, use FSCS' protection checker.
Features you can get with a current account
Features you can get with a current account
If you're looking for free cash
Some banks and building societies offer big upfront cash bonuses for switching accounts to theirs from a different provider. These bonuses mean you can earn up to £200 if a bank is particularly keen to attract new customers.
If you're looking for interest
While most current accounts pay little interest on positive balances, there are some options out there for people who would like to earn something on their current account balance. Other accounts come with linked savings accounts that are only available to current account holders.
If you need an overdraft facility
Sometimes, when money is tight, you may need to dip into an overdraft. While a lot of bank accounts charge close to 40% interest on overdrafts, not all do. There are far cheaper options out there if you know where to look, while other accounts offer an interest-free buffer up to a couple of hundred pounds. You absolutely can still switch accounts while overdrawn too.
If you want ongoing rewards
As well as a one-off bonus for switching, you can find bank accounts that pay ongoing rewards for staying with them. These range from cashback on bills, discounts at certain shops or even something as simple as £5 a month added to your account. Many of these also have a monthly fee, however, so make sure you're getting value out of them.
If you want to save on fees abroad
Most standard current accounts charge you a fee to use your debit card outside the UK – whether that’s in a shop, in an ATM to withdraw cash or even on some overseas websites - but not all of them do. Finding an account with no foreign transaction fees can save you serious money if you're a frequent traveller.
A high interest current account works in the same way as a regular current account, but you have the opportunity to earn some interest on your money. This is why people might ask whether it’s worth getting a high interest current account over a savings account?
However, the interest on current accounts does have its restrictions, which means if you have bigger savings goals in mind, it’s still worth comparing savings accounts to make sure your money is working as hard as it can.
High interest current accounts are also only replacements for easy-access accounts - with bigger rates available elsewhere for people prepared to lock their money away.
But for a large number of people - especially anyone with money sitting on 0% interest - there’s very little downside to moving to a current account that pays you to bank with it instead.
How to compare bank accounts
Decide what features matter most to you
Compare deals
Check the requirements
Check any fees are worth it
Apply or start the switching process
Applying for a new current account is simple. You just have to provide documents to prove your identity and address.
You can apply for a current account at a bank or building society online, in a branch, by phone or by post.
You can also use the Current Account Switch Service to swap over to a new bank account at the same time as you close your existing account. Some deals even give you a cash reward for doing this.
Here are some of the documents you can use:
Proof of identity - a passport or driving licence
Proof of address - a council tax or utility bill, a bank statement or a tenancy agreement
Nearly 50 UK banks and building societies are signed up to the Current Account Switch Service (CASS).
Importantly, a lot of banks make any signing-up bonus conditional on you using the service.
The good news is it's simple to use and guarantees your payments will be switched and your balance will be transferred. You'll be reimbursed if you end up paying any charges or interest if anything goes wrong or there’s a delay.
Your new account's provider takes care of the switching process for you. This includes:
Opening a new current account
Moving your balance or overdraft across
Switching Direct Debits and standing orders
Making sure any payments into your account - such as wages, pension or benefits – are moved across
Your existing provider takes care of closing your old current account.
The Current Account Switch Guarantee means that if anything goes wrong, you'll be refunded any interest and charges on both accounts.
Not quite everyone is signed up yet, but you can see a list of banks and building societies on the Current Account Switch Service here.
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