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Bank accounts – key factors to consider

Category: Banking
Author: Tim Leonard
Updated: 25/06/2018

Bank accounts are generally designed for the purpose of paying in your salary, pension or benefits payments, and allow you to pay out to cover bills and all other expenses. However, there are still many options for you to choose from when it comes to how you want to run your account; everyone has different needs and desires. These can be accomplished through a variety of account features.

Credit interest

If you're not the sort who tends to go overdrawn, then you'll probably be more interested in the amount of interest you can get on your credit balances. Some accounts offer inflation-busting rates of interest, but usually only on a proportion of your balance. These high-interest current accounts are becoming increasingly popular, although you must be aware that they tend to come with further criteria, such as a minimum monthly deposit or a monthly fee.


If you sometimes (or always) spend more than you earn, you'll want to have an account which charges a low rate for arranged overdrafts. You may also want to look at what rate you'll be charged on an unarranged overdraft should you go overdrawn unexpectedly, as these rates are typically around the 25-30% mark, although lower rates are available.

Be aware that some accounts charge a fee when you're overdrawn, either instead of or in addition to interest.

To give you a level of protection against overdraft fees and/or interest, some accounts have a 'buffer' amount. This lets you go overdrawn up to this amount without charge. Make sure you understand the terms of this arrangement as sometimes it only covers interest or fees, and sometimes both.

Buffer amounts may be optional extras, and not automatically granted, so make sure you ask your bank about them.

Monthly fee

A number of current accounts require a monthly fee. This is normally charged by the bank to fund some benefit of the account, such as a lower overdraft rate, higher interest for in-credit balances, or a higher overdraft buffer amount.

Depending on your circumstances, the extra features could outweigh the fee, making it beneficial regardless.

Access to the account

Make sure you choose an account which you can access how you need.

Some accounts are only accessible via internet and phone, while others allow you to deal with your account through branches and even the Post Office. This can be pretty handy for withdrawing money and paying in cheques.

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Disclaimer: This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.