Current Accounts: The Nucleus of Personal Banking
Current accounts provide customers with easy access to their money. They allow funds to be deposited which can then be withdrawn from an ATM, over the counter, or via transactions.
Current accounts allow direct debits and standing orders, which allows a customer to set up automatic payments such as rent or utility bills that get paid periodically. Many accounts also offer online banking, enabling customers to manage their finances at their convenience.
Current accounts are not usually profit-making products for banks, once the costs of staffing, debit transactions, ATM, maintenance, and security for online banking systems are accounted for. Instead, they are a route into broader personal finance products, such as credit cards, savings accounts, loans and mortgages.
As banks compete against each other for your custom, some restrict their best products to current account customers. Some offer specific perks, such as travel insurance, cashback, interest or 0% overdrafts on their current accounts.
Since current accounts are primarily used for transactions, interest rates are generally low. However, there are often some monetary perks available. Some current accounts offer higher interest rates for an introductory period, or require a minimum balance. Some perks also require a minimum deposit every month.
A useful way of making more from your money is to transfer excess funds from your current account into a high interest savings account every month.
Consider your banking needs. Do you really need a local branch?
Current accounts traditionally handle most inbound and outbound transactions. Therefore you need to consider accessibility to your account.
If you are heavily dependent on cashier services, then a bank that offers an extensive branch network covering your local area is likely to be your best option.
Bank online for better current account deals!
If you have little time or little need to access a branch – if your salary and bills are pre-arranged, perhaps – then a provider that offers state-of-the-art online banking access and telephone support could prove more beneficial.
There are often better interest rates and benefits available, such as 0% overdraft facilities, because managing accounts online and via telephone reduces the costs of managing your account.
Many banks allow withdrawals and deposits to be made via the Post Office. See their current list of eligible bank accounts.
How can you benefit from an overdraft?
Most current accounts offer an overdraft facility, which can be used as a form of borrowing. The limit is usually negotiated with your bank and can normally be increased or decreased where required. Some banks offer a small interest free overdraft facility without request, but you should always check with your bank to avoid penalties. Interest charges apply to some or the entire overdraft, so it is always best to check the costs that you will incur.
Which4U: Quick Current-Account Comparison
Find the right account through Which4U by comparing bank accounts in our easy-to-use tables, which will allow you to compare the main differentiating factors, interest rates and overdraft facilities.
Simply select the account provider that offers the best deal for you and click ‘Apply’. You will then be taken to that bank’s website to make your application. In most cases, you should get an instant decision online!