Current Accounts

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). 

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

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 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.

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 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.

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. 

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. 

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. 

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:

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.

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.

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.

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.

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. 

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. 

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.

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. 

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.

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.  

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.

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.

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.

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. 

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.

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.

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.