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Opening a current account is something we don’t tend to do very often. In fact, most of us are still using the first bank account we ever opened. It can seem quite an inconvenience to change current accounts as many people have various different transactions set up on them, such as regular direct debits or standing orders from the account or salary payments into the account. However, it’s really no bother and changing account could really save you money. The deals offered by different banks vary significantly, and even with the same current account that you’ve had for years it’s likely that your bank has changed the terms and conditions several times. When looking around at new current accounts, first check the charges applicable on the account as this is how banks really make a killing. Fees for becoming overdrawn – authorised or unauthorised – can be extortionate. This is especially important if you anticipate being in the red quite regularly. Some banks also charge a regular fee for accounts that regularly have low balances. Then look at interest rates. You should of course transfer any spare cash left over at the end of the month into a high-interest savings account to make the most from your money, but it’s good to have a reasonable interest rate in your current account to make you more when you have lots of cash in it. On the same note, check how easy it is to transfer money from the current account to savings accounts. Many banks offer quick and simple online or phone transfers, although the speed and ease of the process can depend on whether your savings account is held with the same bank. Some banks allow you to set up an automatic regular cash transfer to a savings account should your current account reach a certain level specified by you. Banks also vary in how they supply account statements. Some will post a monthly statement to you, while others make statements available online only. Some banks charge for requesting additional copies of current or previous statements. Even with banks that have an online facility, it may not be possible to obtain statements going back more than a couple of months or so. If your working patterns or lifestyle make it difficult for you to get to a branch, investigate how easy it is to bank using other methods such as online banking or telephone banking. Look at the features of the service in detail, as you may not be able to do everything you want either online or over the phone. Again, this varies a great deal from one bank to another. Also check the various features of the current account itself. Does it include a chequebook? Will you get a card for electronic payments and cashline withdrawals, and if so, what are its features? There are different types of current account on the market tailored specifically for particular needs. One example is online accounts, where all types of transactions and processes can (and often must) be done online. Student accounts are also offered by some banks. These tend to have lower charges and sometimes offer incentives (although these aren’t always necessarily good value for money – always go by the benefits and features of the account itself and don’t allow yourself to be lured by free gifts or discounts). Some banks also have fee-paying current accounts that offer various benefits such as cheap holiday and travel deals, reduced-cost insurance or discounts in certain shops and restaurants. These features may seem attractive, but think about how much value for money you would be getting. If the account costs £10 per month to maintain, do you think you would save more than that in discounts and cheap deals? Even if you have a bad credit history, it can still be possible to open a basic current account that doesn’t have a chequebook or overdraft facility. Watch out, though – the charges for accidentally going into the red with basic bank accounts can be fairly hefty. However, they can be a good option for people with debt problems who’re trying to get their finances back on track and build a better credit score for themselves. This article is copyright protected and is not for republishing |
