There are lots of things to consider when you choose an account for your everyday banking. We share our top 9 tips for finding the perfect current account for your needs.
Choosing a current account can be trickier than it first seems. As well as providing a home for your everyday banking, your current account needs to work for your individual banking style. We give you our top 9 tips for finding the current account to fit your finances.
1. Loyalty doesn’t always pay
Though loyalty in other walks of life can lead to discounts and preferential treatment, it’s fair to say that in the financial world you’ll rarely be rewarded for sticking with the bank that you, your parents, and your parents’ parents have banked with for decades.
Rather the market is ripe for new customers, and you’ll often be rewarded more handsomely for signing up with a new provider than staunchly waving the flag for the bank you’re most familiar with.
Shopping around and finding out what is on the market is certainly worth doing, particularly if you have had a current account with the same bank for years. By comparing the different current accounts out there you can see how yours measures up, and switch to a new deal that better suits your banking style.
Switching current accounts is also usually very straightforward. Most banks are keen to secure your custom and so are more than willing to transfer over your current direct debits, standing orders and other details to your new account for you.
2. Get to know your banking style
It’s a good idea to have a look through your recent bank statements and pay close attention to your income and outgoings for the month. If you spend the majority of the month clearly in credit, you should go for a current account that rewards you for being in the black.
If your banking habits do leave you mostly in credit month to month, it’s worth comparing the interest rates available on current accounts so that your money is working as hard as it can when you have a positive balance. However if after reviewing your statements you find that you’re prone to regularly dipping into your overdraft, a different set of rules will apply.
3. Get the best deal on your overdraft
If you spend most of the month in your overdraft it’s vital to make sure you’re getting a current account that offers a competitive overdraft deal. Many current accounts come with interest-free overdrafts, either for a short introductory period or longer, so if you are paying interest on time spent in the red it’s worth shopping around for an account that doesn’t sting you for dipping into your overdraft.
If you tend to spend the month both in credit and in your overdraft, it’s worth looking for an account that offers you a mix of the two extremes: i.e. it pays you a competitive rate of interest for when you’re in credit and offers a low-rate or interest-free overdraft for the times you dip into the red.
4. Look into a package account
A package current account offers a variety of discounts and add-ons such as travel insurance and breakdown cover, in exchange for a regular fee. If you could benefit from these perks it’s worth looking into the package accounts on the market to see what’s on offer.
However remember that package accounts come with a monthly fee, and you may dispute whether the cost is worth the proffered benefits. If you are thinking of going for a package account it’s important to weigh up the monthly fee against how much money you will save by taking advantage of the account’s extra features and shop around to see if you can get a better deal on the benefits included elsewhere.
5. Decide how to access your money
Before you decide on a current account it’s worth considering how you’ll need to access your money. While some banks allow you in-branch as well as online and telephone access, a number only offer online banking. If you prefer to access your money from a branch as well as online, this is something you will have to factor into your decision.
6. Do you need extras?
Before settling on a current account it’s important to think about what extras you need to carry out your day to day banking, such as a chequebook, pass-book, or debit card. Not all these facilities will be offered automatically by every current account, so you will need to check what’s included before you apply.
7. Find out the minimums
Some current accounts specify a minimum amount that you will need to pay in each month in order to keep the account open, which could range from around £500 to £1,000. Alternatively you may need to meet a minimum salary requirement in order to be eligible for the account.
Either way, you will need to check this before you commit to opening the account, so that you are happy with how much you may have to pay in per month.
8. Find out the charges
When looking for your perfect current account it’s advisable to look into any charges that might be applied to the account. For example some providers will charge for banker’s drafts whereas others don’t. Likewise differing charges may apply for requesting an extra copy of your statement or using your debit card to withdraw money abroad.
You can find information relating to these charges in the ‘full information’ section of our comparison tables, which will help you get informed about all the different features of an account you’re interested in.
9. What incentives are offered?
Finally you may want to check if there are any incentives offered for opening the account. Though this shouldn’t be a deciding factor on its own, a reward or perk for opening the account may help you to make your decision.
For example some current account providers offer a lump sum of cash for opening the account (though this is often subject to conditions such as paying in a minimum monthly amount upon account opening). Other incentives might include extras such as travel insurance, or you may receive a small cash reward for each month that you pay in a certain amount.
