MOST people need a bank account so they can receive a salary or benefits and to pay the bills.
Here is how to find the best current account so you can save, spend and send your hard-earned money.
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What is a current account?
A current account is a financial product that you set up to receive your salary and pay bills, as well as to manage your day-to-day spending.
Current accounts are offered by banks, building societies and some fintech brands.
They may also be referred to as a personal current account as they are used by individuals to manage their finances.
You can use a current account to set up direct debits and standing orders to pay bills or transfer money to people.
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You will get an account number and sort code that you can use to use to receive money and will usually get a debit card so you can make cash withdrawals and spend your money.
Your provider will send monthly statements that show your income and spending plus your current account balance.
You may also be able to setup alerts or login to online banking to monitor this more regularly.
There are also business current accounts that the self-employed can setup, if they want to keep their personal and processional finances separate.
Can you have more than one current account?
There is no limit on the number of current accounts you can have.
It may be worth having more than one if you have joint financial responsibilities with someone.
One account could be run jointly such as to pay a mortgage and you may want your own personal one for individual spending.
Some current accounts may require a minimum balance to access certain perks, such as interest payments so make sure you can maintain these if you have more than one product.
What are the different types of bank accounts?
There are plenty of bank accounts to choose from.
A standard current account lets you send and receive money and gives you a debit card for spending and withdrawals.
The best current account may give you an overdraft and even offer interest, cashback or rewards.
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There are also packaged accounts that include extras such as travel insurance and breakdown cover on top of the traditional banking services.
Banks and building societies also offer accounts aimed at students, graduates or those with bad credit.
Who can open a current account?
Generally, you need to be over 16 to get a current account, although the minimum age may be 18 for some banks.
You will need to provide proof of your identity such as a driving licence or passport, as well as evidence of where you live – such as an energy bill or bank statement.
Your credit rating is also important.
You may need to pass a credit check to get a current account, especially if it includes an overdraft.
A poor credit rating, such as if you have a history of bad debts or county court judgments, may make it harder to be approved for a current account.
What is a basic current account?
A basic current account is a fee-free “no-frills” account that won’t pay interest or offer an overdraft.
It will let you do the simple basic banking tasks, such as sending and receiving money and using a debit card for withdrawals and spending.
This can help you get a current account with bad credit.
They are good for people with poor credit ratings as you can focus on rebuilding your score by showing you can keep up with your bills and eventually qualify for a better deal.
What is a reward current account?
Current accounts can do more than just letting you send, spend and receive money.
Some will even pay interest on your balances or cashback on your spending.
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This is known as a reward current account.
There may be strict requirements to qualify for the rewards, such as keeping a minimum balance or spending a certain amount.
You may also have to pay a monthly or annual fee so make sure the value of the rewards is worth more than what the account costs.
How do I change my personal details?
You may want to change your personal details if you get married, divorced move home or just want to use a different email.
This can usually be done by logging into your online banking or mobile app.
You could also visit a branch or make changes over the phone.
You may need to provide evidence of the changes and pass ID checks.
Can I add someone to my current account?
You are usually allowed to add someone to your current account.
This may be because you want to give a partner access to your finances.
They would need to pass a bank’s ID checks and you would both need to visit the branch together to complete the required forms.
Some may let you add another person online.
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If approved, the product will become a joint account.
This gives you both access to the balance and any overdrafts.
You may both also get your own debit cards.
There are risks to combining your finances though, and make sure you are running a joint account with someone you can trust.
One account holder could spend all the money and you are both responsible for clearing the overdraft even if one person uses it all.
Joint accounts also create a financial link between you and any other account holders.
All transactions will be able to be viewed by all account holders, so you’ll lose your privacy.
You’ll also be jointly responsible for any debt on the account; which could harm your credit rating if payments are late.
Why should I switch current accounts?
Many people may feel loyal to the first bank account they opened when they were young.
But you could be missing out on the best current account interest by sticking with an old provider.
New deals are released all the time and you could qualify for a larger overdraft or access an account offering spending rewards.
Some banks and building societies even pay up to £150 if a new customer switches to them.
Can you get interest from a current account?
Some current accounts will pay interest but there may be a monthly or annual fee.
The interest paid may only be on a certain amount of your balance though and is often lower than what you could get in a savings account.
You could also get rewards or money back on certain spending.
Can a savings account be converted to a current account?
Some savings products offer current account-style services such as a debit card you can use for spending and withdrawals.
But you can’t usually convert a savings account into a current account.
They are different types of products: a savings account is setup to pay interest on money you have set aside, while a current account is for everyday banking.
There may be withdrawal limits on a savings account or a minimum or maximum balance.
Also, a savings account doesn’t offer an overdraft.
Can I transfer money from a credit card to a current account?
If you are struggling to clear your overdraft or repay some bills, a credit card could help.
Some credit cards will let you do a money transfer that can be used to payoff an overdraft, or just to boost the amount in your current account.
Be careful though as this will still need to be repaid once your credit card bill arrives, or you could get hit with hefty interest charges if you miss repayments.
This risks pushing you further into debt.
How to transfer money from a current account to another account
It is relatively easy to transfer money from one current account to another.
All you need is the other person’s name, account number and sort code.
You can then usually setup the transfer using online banking, in-branch or over the phone.
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Just enter the account details you are sending money to and how much.
Make sure you know the person who you are sending funds to and that their details are correct, as it can be hard to get your money back if there is a mistake.
Some banks will warn you if the details you have entered don’t match their records.
There may be limits on how much you can transfer per day or per transaction.
A transfer between UK banks can happen in minutes or may take a couple of hours while international payments can take a few working days.
How to switch current account
Current accounts are offered by a range of banks, building societies and fintechs.
Think about the best current account for your needs and shop around to compare the best features.
Some accounts may also offer mobile banking, apps, spending alerts or help with budgeting and saving.
A comparison website can be a good place to find the best current account deals rather than contacting each provider separately.
You can search by account type and see the interest rates you could get paid plus any fees.
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Most of the main banks and building societies are part of the current account switching service.
This means your new provider will handle all the hassle of your current account switch.
That includes closing your old account and moving your balance, direct debits and standing orders, as well as ensuring your salary goes to the right place.
You don’t even have to tell your old bank that you are switching as everything is done automatically.
The switch is usually done within seven working days.
What do I need to switch current account?
Switching a current account is a similar process to opening a new one.
You still need to prove your address and who you are and a credit check may be needed.
When switching you will also need to complete a current account switch agreement, that confirms you want to move, and an account closure form that provides details of the old product to be closed.
You can set a switch date and your new bank will work behind the scenes to get all your old payments and your balance transferred automatically.
It is best to avoid setting up new payments during this period.
How do I close a current account?
Your old current account will automatically be closed if you are using the current account switching service.
If you aren’t switching, you may need to contact your bank to arrange for the account to be shut.
You would need to clear any overdraft and cancel direct debits and standing orders before it is closed.
A bank can also close your current account if it decides to stop offering banking services or your particular product. It must give you at least 14 days notice.
