Current accounts are the the most common type of bank account used in the UK thanks to their huge range of flexible benefits designed to help you get the most from your personal banking.
Whether you’re looking to save cash, pay direct debits or simply need an account to deposit and withdraw your wages from, current accounts are the ultimate multi-use banking facility.
Let’s take a closer look at how current accounts work, the different benefits on offer and how you can get the perfect current account to meet your personal financial circumstances.
Current accounts are designed to give you quick and easy access to the banking services that most of use each and every day.
They’re offered by almost every bank and building society, and you’ll be able to use your account in a range of ways, including:
There are a number of essentials add-ons that come with each current account but they aren’t always available to everyone or may not be offered by every bank. When you compare current accounts online, it’s well worth spending a bit of time considering the features of each account to find a bank that meets your needs.
One of the most widely used forms of credit in the UK are current account overdrafts. This line of credit is attached directly to your current account and will allow you to spend beyond the funds that are currently available in your account.
When you open your new bank current account you’ll have the opportunity to apply for an overdraft limit. This will be based on your income, credit history and how well you’ve managed any other accounts with this bank.
Unlike a personal loan, there’s no fixed term by which you’ll have to repay your overdraft, although in most cases you’ll be charged a nominal rate of interest for using it.
If you’re not currently eligible for an overdraft then you’ll still be able to get a current account but will not automatically have a credit facility at this time. This doesn’t mean you can’t apply again in the future if your financial situation changes or once you’ve shown you can successfully manage your new account.
The growth of online banking has been a revelation for current account holders, saving countless trips to the bank and giving you the freedom to carry out a range of banking activities online.
At the click of a button you’ll be able to switch funds between accounts, send money to friends and family, have a quick glance at your balance and much, much more. What’s more is that with mobile banking apps now more accessible than ever, payments from your account can even be secured with biometric and fingerprint data.
With debit and credit cards now responsible for almost twice the financial transactions of cash in the UK, plastic is commonplace with almost every current account. Use your debit card for in-store and online shopping with contactless payments typically available up to £30 per transaction.
You’ll still have a PIN for cash withdrawals and larger purchases and will be able to use your card at more than 70,000 cash points across the UK.
As well as allowing you to actively check banking activities through online and mobile banking, you’ll be able to set up alerts to help you keep on top of all deposits and payments from your account as they happen.
Some banks with wider financial nets can even provide your current account mobile app with the latest share prices and other financial news.
As well as the standard current account that we’ve looked at so far, there are also specialist accounts that broaden the advantages on offer to those that meet certain circumstances, or have a need for specific features.
Packaged account come in all shapes and sizes, and can often be tailored by banks and building societies to meet your needs. They can include a variety of financial tools such as credit cards, debit cards and overdraft facilities as well as travel insurance, cheque books and integrated savings.
These accounts will usually ask that you pay a small monthly or annual fee to qualify for these features or deposit a minimum amount into your account each month.
Designed with savers in mind, high interest current accounts maximise your earnings from the cash you hold. They’re great for those who wants to keep larger sums of money tucked away whilst still retaining the key benefits of current accounts such as ease of access.
As with packaged current accounts, you’ll need to make sure that you meet the eligibility criteria which can include keeping your account at a minimum balance, not making withdrawals or paying a fee.
If you’re credit score isn’t great or you simply don’t have a need for credit facilities on your account then a basic current account could be the answer. These simple, no frills bank accounts offer a simple way to receive and withdraw funds as well as providing access to online banking and debit cards without overdrafts or credit cards.
You only have to look at challenger banks to see how far the online banking industry as come. As their name suggests, they’ve been created to challenge the established mainstream banking sector, heavily reducing overheads and costs by operating current accounts online.
As the financial and retail sectors continue to evolve, these challenger banks bring a fresh approach to current accounts, embracing new technologies such as cryptocurrencies and mobile payments to make banking simpler for their customers.
With so many current account options on the market choosing a bank that suits your spending habits has never been easier. It all starts by comparing current accounts online with CreditRaters.com where you’ll be able to choose from our panel of trusted, nationwide current account providers.
Compare interest rates, features, benefit and fees from the UK’s top current accounts and apply online minutes with a short, simple online application form.
If accepted, your account details including any cards and PINs will be sent to you by mail within 7-10 working days.
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