Compare the Best UK Current Accounts | moneyfacts.co.uk

Moneyfacts.co.uk will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by Moneyfacts.co.uk will always be from news@moneyfacts-news.co.uk. Be Scamsmart.

bank icon

Current Accounts

Compare the best current accounts

The comparison chart below shows the best bank accounts available in the UK right now.

Advertisement
Note

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution. Moneyfacts.co.uk Limited is an independent credit broker not a lender. We will receive a payment from credit providers where customers link to them from Moneyfacts.co.uk. None of these arrangements affects our independence.

Disclaimer

All overdrafts are subject to the applicant’s status. You may not be offered credit. All rates and fees are subject to change without notice. Please check all rates and terms before borrowing.

A guide to current accounts

Derin Clark

Derin Clark

Online Reporter

At a glance

  • There are a range of current account types offering different benefits to different people. 
  • Most accounts come with a cash card or debit card. You may also be offered a cheque book and the option to have an agreed overdraft.
  • Some current accounts come with monthly or annual fees. Make sure you know how much your bank will be charging you and when.
  • A credit check will be performed when you open a new current account so be sure that your credit score is as healthy as possible beforehand.

What is a current account?

A current account lets you keep your money in a safe place while still allowing you to spend it, transfer it, use it to pay bills and have more added to it. Current accounts usually come with a cash or debit card, which you can use to make purchases or withdraw money from your account. They may also have an agreed overdraft facility (essentially a form of credit should you need it). 

Types of current account

The different account types of current accounts that are available to adults are:

Standard accounts

Standard current accounts, which offers you all the 'standard' account features, but nothing extra. These accounts may or may not charge a monthly or annual fee.

High interest current accounts

High interest current accounts offer you a competitive interest rate on funds up to a certain balance and/or monthly cashback for keeping your account in credit. These accounts may come with monthly fees, and will likely require a certain income and number of standing orders or direct debits, but could offer you some extra cash on a monthly basis if you use them well.

Bank accounts for bad credit

Basic or guaranteed accounts can be helpful for those with a bad credit history or those that do not want to have an overdraft. These types of bank accounts often do not require a credit check.

These accounts while accessible, may charge certain fees either as a regular charge and/or for transactions.

Current accounts with overdrafts

Current accounts with overdrafts include a facility to borrow money in the short term from your bank. If you use your overdraft then you will normally be charged interest on the amount used. You should agree an overdraft arrangement with your bank before going overdrawn.

 

Free current accounts

Some current accounts won't charge you a monthly fee although they are likely to still charge fees and/or interest for overdrafts. These may also offer interest on credit balances and may also have funding requirements. 

Packaged bank accounts

A packaged bank account is a current account that includes additional products and services – such as breakdown cover, mobile phone insurance, travel insurance, home emergency cover – exclusive access to other products from the bank, for example an exclusive rate of interest on a savings account and retailer offers and discounts. These accounts usually charge a monthly fee. Read our guide to packaged bank accounts to learn more. 

Organising insurance and breakdown policies individually

As an alternative to packaged bank accounts, you may want to organise insurance and breakdown cover individually. Discover the best UK policies with the help of Moneyfacts.co.uk. Learn more and apply direct today.

Home insurance

UK breakdown cover 

Home emergency cover

Student current accounts

Designed to meeting the financial needs of students, student bank accounts tend to offer the same features as standard bank accounts alongside interest-free overdrafts and student incentives such as discounted rail travel. 

How to open a current account

Most banks and building societies allow you to open a bank account in a branch, online, by phone or by post. The channel to open a bank account is dependent on the bank or building society and can be restricted for certain brands and products. For example, some of the challenger banks will only let you open an account using their mobile app and some bank accounts are only available online. Here are our seven steps to opening a bank account:

1. Compare current accounts

You can use our charts to compare different types of current accounts including those that specifically offer current account switching incentives. Our chars help you to compare interest rates, fees and features of different current accounts, including if they offer protection under the Financial Services Compensation Scheme.

 

2. Open a bank account online

If you are over 18 and have lived at the same address (and been on the electoral roll) for a number of  years, it is likely that you will be able to open a bank account online without the need to write or send anything such as an application form or identification in the post.

Find out more in our guide how to open a bank account.

3. Check you are eligible for the account

Each bank account will have a required minimum age, place of residence (some accounts are only available in Northern Ireland or Scotland for example) and some accounts may have minimum salary requirements too.

Some banks may accept you if you are struggling to prove your address, find out more in our guide.

4. Be ready for a credit check

Most standard current accounts will require a credit check  - if you are worried about being accepted you can check your credit score, in some cases for free - find the best credit check deals.

If you know you have a bad credit score then there are dedicated accounts that help those with bad credit. Find out more about opening a current account with bad credit.

 

5. Make sure you use the Current Account Switch Service

Many of the best current account switching deals are only available if you use the Current Account Switching Service. This service makes sure all of your regular payments, such as direct debits and standing orders are moved to your new bank. They also ensure that you won't miss any of your regular payments, making this a highly convenient way to switch your bank account. 

6. Wait for your debit cards to arrive

Your current account should include a debit card to allow you to make contactless payments, buy goods online, pay for items in shops and to withdraw cash from a cash machine. These can take up to two weeks to arrive, with the best banks manging to do this in three days on average.

If you open a bank account and have bad credit you may receive a prepaid card instead. 

7. Set up online bank and/or download the app

Most current accounts now come with access to banking services through the bank's secure website or via an App on mobile devices. You should receive full instructions as part of the current account opening process.

Who is a current account suitable for?

The world of banking has evolved with different types of current accounts designed to suit the needs of different types of people. For example those with a poor credit history can now open an account with a range of banking services, such as accepting direct debits and includes a card to make online and instore payments. Those looking for the best perks and incentives will now find it easier to switch current accounts and can do this in seven days thanks to the Current Account Switching Guarantee. 

 

 

How to choose a current account

Now that you've got some idea of what current accounts there are to choose from, you'll have to determine which is the best current account for you. This will of course depend on your personal circumstances. If you're often overdrawn, you'll likely be drawn to an account with overdraft facilities. If you never go overdrawn, on the other hand, you might want to take advantage of a high interest current account instead.

If you're looking for the best current account that gives you something back, a switching incentive might lure you in with some offering up to £125 to switch. However, a little bit extra every month might work out as more lucrative over the long run, so you may want to consider a cashback or interest-paying current account instead. Regardless, remember that a lot of incentives will require you to close your old account, so you can't just open an extra account for a cash offer.

Whatever you are after, make sure to compare current accounts on all their features, not just their benefits, otherwise you might find that a cashback offer is undone by a high account or overdraft fee. Once you've made your choice, it's easy to switch bank accounts, especially thanks to the Current Account Switch Service and its accompanying guarantee. Read our current account switching guide to find out which providers offer it – you'll find that almost all do nowadays.

What to compare when choosing a current account

The cost and value of fees

Some types of bank account charge fees, for example a packaged bank account has a monthly fee to offset the cost of additional products and services bundled with the account. You should consider if you will use the add-ons included in a packaged account and if so if it is good value to pay the monthly fee. 

Those bank accounts designed for those with bad credit may also charge fees, often a monthly fee and some transaction fees. In this case, the account provider is looking to cover its operating costs and generate profit.

There are current accounts that don't charge fees, but they may require you to deposit a specific sum of money each month to qualify.  

 

The amount of finding required

You may be required to pay in a minimum amount of money per month. Usually, this restriction is applied to high interest current accounts, which offer a decent in-credit interest rate in exchange for your commitment and regular income. Aside from a minimum monthly funding amount, these accounts may require you to hold several direct debits on it, to make sure your account with them is your main banking product.

The credit interest you could earn

If you are likely to have a credit balance then a high interest current account may be better for you. These current accounts usually offer a higher rate of interest than standard current accounts usually up to a set balance.  Above this, interest may not be paid at all, or at a very low rate, so you may want to maximise your returns by placing any money above this amount in a separate savings account. Note that these accounts do tend to come with high overdraft rates, so you should only consider an account that offers credit interest if you’re not someone who regularly goes overdrawn.

The cost of an overdraft

If you are likely to dip into the red on your current account, you should consider one that charges a low rate for arranged overdrafts or offers you an interest-free tier before you get charged. This can prove to be very valuable if your income and outgoings are nearly the same and your account balance goes near or below zero on a regular basis.

How you want to use the account

Current accounts from challenger banks are usually only accessible by an app or the internet. Some bank accounts will also offer access to your account through retail locations such as the Post Office, this is handy if you need to pay cash into your account. 

Most high street current accounts can be operated across a range of channels including phone, branch, online and app. 

Cost for cash

If you need to withdraw cash from cash machines you should also check the cost to do this. You can also find cash machines near to you using the LINK ATM locator.

Sending payments to someone else - how to check the account is valid

If you’re sending a payment to someone else, you need to check that the bank account you’re sending it to is valid. This is in order to prevent fraud and ensure your money doesn’t end up somewhere it shouldn’t. Your bank may run its own checks, but it is best not to rely on these and to closely double check the details you are using. You may want to send a small payment first to make sure it arrives with the recipient.

Should I get a savings account or a current account?

There is a different purpose for a savings account to a current account. A current account has more functions than a savings account, designed to facilitate your day to day needs to pay bills and pay for goods and services. Whereas a savings account is designed to help you build deposits over time and reward your efforts in interest.

What is the Current Account Switch Guarantee Service?

The Current Account Switch Guarantee Service facilitates the moving of regular payment such as standing orders and direct debits to your new bank account. The service should take care of doing this for you and if something goes missing you should be protected. The switching service will not set up paperless statements or your account’s marketing preferences. You will still need to do this. You should also check that you have enough direct debits, etc in place to meet any criteria required for your bank account. Read our guide on the switching service to learn more.  

Current Account FAQs

How many current accounts can you have?

You can open multiple current accounts with a number of different banks. Remember though that if these each need a credit check, your credit score may be affected by multiple applications in quick succession.

Can I get a free current account?

Yes, there are free current accounts available. Just select 'Free in the relevant search box and all current accounts that come without monthly or annual fees will be selected. These accounts will still charge fees for overdrafts and for some other types of transactions.

What happens if I go over my agreed overdraft limit?

The column 'Overdraft Rate' will show you the rate that you are charged if you go into an arranged overdraft. Previously. if you exceeded your arranged overdraft limit, unarranged overdraft charges would apply, which could be a lot more expensive. However, as part of the FCA’s focus on reducing high cost credit this changed from 6 April 2020. From that date unarranged overdrafts must not be charged at a higher rate than arranged overdrafts, however the amount you pay for an arranged overdraft has increased in many cases. You can find both the arranged and unarranged overdraft charges for each account by clicking on 'Further Details'. Your overdraft limit will be determined by your credit history – your provider may change it depending on whether and how you use it. Read our guide to current account overdrafts to learn more. 

How do bank account providers make their money?

While providers use the funds in bank accounts to lend to others in the form of loans and overdrafts, gaining interest (and therefore money) in return, if a good rate of interest is offered on the account, they naturally make less money from it. That’s why these accounts tend to come with fees and/or high charges, such as for (unarranged) overdrafts or bounced cheques.

They also take a cut of each debit card payment made (called the interchange fee) and make money from fees and charges for things like overdrafts, refusing a payment due to a lack of funds in the account or using a debit card abroad, where they may charge a fee and make a profit on any currency exchange rate they offer.

Since some banking providers are more keen to gain custom than others, there can be huge differences in the benefits versus charges on offer across the market. That’s why it’s always a good idea to compare deals to find the best account for you – and to review your account occasionally. As bank account providers change their deals quite often, usually without adjusting the deal their current customers are getting, it pays to keep a weather eye on the market.

How do digital only banks work?

There are a growing number of online-only banks; some of these are challenger banks such as Atom, Starling and Monzo, while others such as Bo are brands that are part of a larger banking group. There are also fintechs that offer banking type services but are in fact a payment services provider rather than a bank. These online banks and services do not have any branches. Find out more about how online and digital banking apps work and how safe they are.

Sending money abroad

Find out how to send money abroad easily, securely and quickly using an international money transfer specialist. Our guide explains how it works and the costs involved.

 

Seasonal Banner Seasonal Banner

Get our weekly newsletter

Weekend Moneyfacts is available free by email to all Moneyfacts.co.uk users.

Send me Weekend Moneyfacts, Savers Friend, The Business Friend and selected third-party offers.

Top current account guides

Related current account guides
guides icon
A guide to tax and your pension

If you’re approaching retirement and will soon be drawing your defined contribution (DC) pension – or perhaps you’re still working but, having hit the age of 55, want to access your funds – you’ll need to know how tax comes into play.

Find out how pension reforms give you more freedom to decide what to do with your money

Read More
guides icon
What do I need to do to open a bank account?

Find out more about how to open a bank account in the UK.

Read More
guides icon
What is the mortgage guarantee scheme?

The mortgage guarantee scheme allows buyers to purchase a home with just a 5% deposit - find out if you qualify in your guide

The mortgage guarantee scheme allows buyers to purchase a home with just a 5% deposit - find out if you qualify in your guide

Read More
guides icon
Financial advice

Financial advice can be offered on an independent basis or is restricted or tied to a specific set of products or providers only. Compare the different types of financial advice, whether to self-direct your investments or use an expert.

Financial advice can be offered on an independent basis or is restricted or tied to a specific set of products or providers only.

Read More
guides icon
Compare UK motorbike insurance

Find out how motorbike insurance works and how to compare the best motorbike insurance deals.

Find out how motorbike insurance works and how to compare the best motorbike insurance deals.

Read More
guides icon
How to get your pension investment strategy right

We explore why your pension investment strategy might differ depending on age and what you can do to get your pension investment strategy right.

We explore why your pension investment strategy might differ depending on age and what you can do to get your pension investment strategy right.

Read More
guides icon
How to choose the right commercial finance broker

Finding the right commercial finance broker can be the key to transforming your business’ prospects, giving you access to the funding you need to catapult your company to the next level. Here’s how to choose the right one.

Finding the right commercial finance broker can be the key to transforming your business’ prospects, giving you access to the funding you need.

Read More
guides icon
How the help to build scheme could fund your self-build project

The Help to Build Scheme is a new scheme announced by the Government in April 2021. The scheme provides £150m in the form of loans to those wanting to get a self-build mortgage.

The Help to Build Scheme is a new scheme announced by the Government in April 2021.

Read More

Cookies

Moneyfacts.co.uk will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy