Your current account is perhaps your most essential financial product - it’s used to receive your salary, pay your bills and carry out everyday spending.
But when was the last time you switched your account, or thought about whether you could be getting a better deal elsewhere?
You could be missing out on rewards for switching and more favourable interest rates by sticking with your current account and not comparing your options.
Switching your current account is really easy too, thanks to the Current Account Switch Guarantee. You can expect to be with your new account provider within seven working days.
Your new bank or building society handles the switchover, so you don’t have to contact your previous provider and all your incoming and outgoing payments will automatically be moved over.
It’s hassle free.
There are a few different types of account to choose from - you just need to pick the right one for you.
These can be a great option if you have a poor credit score and just like your bank accounts without all the bells and whistles.
You’ll have all the standard features of a current account - for example, you can pay in money in cash or cheque form and set up direct debits, but you won’t have access to an overdraft and you may not be given a debit card.
These are current accounts with extra benefits like travel insurance, breakdown cover or mobile phone insurance included. You could even get discounts at chosen restaurants.
You’ll be charged a monthly fee and you’ll want to check whether you actually have any of the perks already so you’re not doubling up on insurance – if that’s the case, you’ll be paying for nothing.
Look out for a high annual equivalent rate (AER), which is the interest you’ll earn on your bank balance.
In a bid to attract customers, banks and building societies are offering current accounts with appealing interest rates, in some cases they could even be higher than easy-access savings accounts.
They could have strict criteria for you to follow, like paying in a minimum amount each month, so read the terms and conditions carefully.
If you have your own company, you may want to think about a business bank account which allows you to keep track of your business expenditures. Some will give access to an overdraft facility too which could help with cash flow.
However, it’s likely that you’ll be charged a monthly fee and perhaps even a transaction fee.
How your cashback current account works will depend which one you choose. Some offer it in the form of a percentage reimbursement (around 1-2%) on your household bill payments. Others will give money back when you spend in certain shops.
You may be charged a monthly fee for the privilege though which could outweigh the benefit of any cashback.
Heading off to university is an expensive time and the right student current account can really help, especially if it has an overdraft with a long 0% interest period.
Some may even have freebies to tempt you, but it’s important to make sure it has the key features you need. Stay out of the red to avoid being charged unplanned overdraft fees.
According to Bacs in July 2018[†]
An overdraft is when you go overdrawn on your account, so basically when your balance dips below zero. There are two types of overdraft, authorised and unauthorised.
This is arranged with your bank and will have a predetermined limit - you’ll have to pass a credit check before being accepted. You may be charged a small fee for going into your authorised overdraft but be careful not to go over the limit as you’ll face steep charges.
This type of overdraft is when you go overdrawn without having an authorised overdraft in place and it’s a bad idea.
You’ll be charged for going into the red and it can get expensive, really quickly. There may be a cap on charges, but you should steer clear of doing this at all costs.
Yes, you can open a current account in two or more people’s names which makes it more convenient if you have shared bills. It’s important that you trust the other joint account holders as they’ll have access to your money and could affect your credit rating.
Midata lets you see the right current account for you based on your previous bank usage.
When you compare bank accounts with GoCompare, you can choose the option to access your midata file and then you’ll be shown the options that best fit your spending habits.
Some bank accounts will require you to deposit a set amount each month, as well as having a set number of direct debits. This could be the case if you’ve chosen an account with an attractive interest rate.