Banking / Current Accounts

Current Accounts
When choosing a current account you should consider factors such as potential charges, whether you want to manage your account online and which cash points can be used without charge. Our current account features section provides a more detailed list of areas for consideration when choosing a current account.

All current accounts are similar in that you can deposit money into the account and then withdraw money at any time without interest rate penalties, subject to any daily withdrawal limits and, of course, your available balance.

However, the facilities offered can vary considerably, as does the naming convention for different types of accounts offered by the various banking institutions.

When choosing a current account you should decide how you will be using your account and what facilities and features you are going to need.  You are then in a position to choose the current account that most suits your needs for the minimum expenditure.

Features
Below is a list of questions you should consider when deciding on which current account to choose.  Remember, you should focus on features that are relevant to you and your banking habits.  For example, if a bank has very high overdraft charges, this should be of little interest to you if you never go overdrawn.

• What is the minimum opening balance required in order to open the account?
• Is a chequebook provided and if so is it supplied with a cheque guarantee card?  If so, what is the limit of the cheque guarantee card (the usual is £50 or £100)?
• Is a cashpoint card provided?  If so, what is the limit on how much you can withdraw in one day?
• Is a debit card provided?  Debit cards allow you to make purchases against your account, with the purchase amount usually being debited from your account on the next working day.  Two types of debit card exist; Switch and Delta.  They work in the same way.
• Which cashpoints can you use without being charged?  You should take into account which cashpoints are available in the areas you are most likely to want to withdraw cash, such as near home, near the office or where you tend to socialise.
• What interest rates are offered on balances in credit?  Some current accounts offer a tiered interest rate structure whereby the interest rate increases as your balance exceeds certain amounts.
• What charges are made on the account?
• Is an overdraft facility offered?  If so, does the overdraft need to be authorised or is it automatic?  What is the interest rate charged on overdrafts?  Is there an arrangement fee, and if necessary, a yearly renewal fee?  If so, how much are these costs?
• How often do you want current account statements to be sent?
• Do you want to be able to manage your account online?
• Do you require high street branches?
• Do you want the added security of your photograph and signature being etched onto your cards?
• Is any assistance offered if you need to move direct debits and standing orders to your new account?
• Are there any introductory offers?  These include receiving a lump sum on opening a new account and receiving an interest free overdraft for a limited period after opening the account.
• Are preferential rates offered on other financial products such as personal loans, mortgages or insurance products?

Charges
For most people in credit, the cost of using a current account will be negligible, if not free. However, there are occasions when you may need to use banking services that incur a charge.

Below is a list of some of the banking services that you may need to pay for.  If you anticipate having to pay for any of these services on a regular basis then it would be worthwhile choosing a current account that charges less for those services.

• Overdraft arrangement fee.
• Interest on amount overdrawn.
• Fee for going overdrawn when not arranged.
• Stopping a cheque (except for lost /stolen cheques).
• Special presentation of a cheque.
• Bank draft (sterling).
• Copies of paid cheques including providing details of paid cheques.
• Duplicate statement/historic copy.
• Same Day Value Payments (CHAPS).
• Foreign currency, travellers cheques and international transfers.
• Cheques, standing orders and direct debits returned unpaid.
• Unauthorised borrowing - items referred prior to payment (Referral Fees).
• Misuse of cheque guarantee card / Switch.
• Cashpoint withdrawal outside the bank's network.
• All Transactions Abroad.

For further information why not go and visit www.adviceonline.co.uk