Compare our best current accounts

The annual equivalent rate, or AER, is the rate at which you earn interest on the balance of your current account.

You’ll also be given a separate interest rate that applies to the interest you’ll be charged if you overdraw on your account – the APR (annual percentage rate).

Basic bank accounts are designed for people with poor credit ratings and offer only basic features. This includes allowing deposits and withdrawals, and the use of a debit card to make purchases.

They might not offer features like overdrafts, interest on your balance, or add-ons such as travel insurance.

Your credit score is calculated based on your credit history. Each credit reference agency has its own method of calculating this.

Your credit score will go up for things like making payments on time and down for things like being late or defaulting on a loan. Typically, the higher your score, the more likely you are to be offered a lower rate of interest or higher credit limit.

There is no absolute pass or fail mark attached to a credit score, with each lender making its own decision on what it considers acceptable.

Your credit report is your history of borrowing and paying bills over the past few years. Lenders send this information to one or more of the three credit reference agencies, which compile reports on UK residents.

Before deciding whether to let someone borrow, lenders check your report from one or more of the agencies. You can request a copy of your credit reports to ensure there are no mistakes on your file, request changes if you see one and add notes explaining any missed payments.

The Current Accounts Switch Service (CASS) helps you close your old account and move your balance, incoming payments and Direct Debits and standing orders to your new bank account.

It works with almost every current account in the UK and usually takes just seven working days to complete the switch.

The switching service is free, although you still have to pay any fees that come with your new account. Your bank has to pay you back if anything goes wrong and you lose out on interest or are charged fees during the switch.

A Direct Debit is when you give a company permission to take payments automatically from your bank account. It decides the amount, but you are free to cancel the arrangement. For example, you can set up a Direct Debit to pay off your credit card. This could be for the minimum amount due, a fixed sum, or the entire balance. Read more about Direct Debits in our guide.

The FSCS is a government-backed program that protects your money and compensates you if your bank, building society, or savings provider goes bust.

It covers up to £85,000 - or £170,000 for joint accounts - held in each official UK financial institution. It also provides cover for other sorts of financial products such as debt management, funeral plans, insurance, credit unions, investments, mortgages and pensions. 

There are several banking groups in the UK, but if you have a total of £85,000 or less with any of them, all your money will be returned to you in the event of each bank or building society in the group collapsing. Other types of institutions have different limits. You can check them all on the FSCS website.

An overdraft is a flexible lending facility, letting you borrow up to a set limit using your current account without asking anyone first. Interest is charged daily, and you are free to repay as little or as much as you like rather than a set amount.

A packaged current account has all the usual features of a current account but with some extra benefits on top. These include things like free breakdown cover, mobile phone or travel insurance. Other popular rewards include discounts when you buy from particular shops or go to certain restaurants. In most cases, you'll be charged a fee to use these accounts.

A standing order is a regular payment of the same amount that’s paid on a specified date. It allows the bank to take money regularly from your account to pay another account. You can use a standing order to pay family or friends, donate to charity, or simply transfer money from your current account to a savings account.

Yes, but there may be limits to how many you can hold with the same bank. It's also worth noting that frequently opening new accounts may harm your credit record.

Yes. There are accounts with no monthly fees but charges may be triggered if you use certain features, such as an overdraft. Read the terms and conditions carefully so you know what you are signing up for.

All current accounts have the same basic abilities - letting you deposit and withdraw money as well as make and receive payments using Direct Debits and standing orders.

However - there are a few different types designed for specialist purposes. The 4 main ones are:

• Standard current accounts - these come with overdraft facilities and potentially other features and rewards

• Basic current accounts - free, open to anyone no matter their credit score, no overdrafts

• Joint current accounts - where more than one person can withdraw cash

• Packaged current accounts - this is where you pay a monthly fee in return for included services such as travel insurance, breakdown cover and the like

You can use the Current Account Switch service to move to a new bank in just seven working days.

If you spend more than you have in your account, you are considered to be overdrawn. You will owe money on your overdraft until you pay it back, and you may be charged a fee. If your account does not have an overdraft facility, payments will be declined until you are back in credit.

It depends on what you need your account for. A current account is best suited for making payments by card as well as paying regular bills by Direct Debit or standing order. Savings accounts usually offer better rates of interest. Find out more about their differences and which one is best here.

Yes, your bank will be happy for you to have two current accounts with it - one for yourself and one joint account.

But, if you do, the bank can legally transfer money from your personal account to your joint one to cover a debt in the joint account. It can only make the transfer from a personal account to a joint one, and not from a joint account to a personal one.

It's not something that happens often - it's only likely to happen if you've repeatedly ignored contact from your bank about the outstanding debt.

It would give you 14 days' notice and can only do it if it won't put you into financial difficulty.

Logging into your account online is the quickest way to check them, but your bank can also confirm them by phone or in writing.