What is a current account?

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Everything you need to know about current accounts, including where to get one, the ways you can use them and how to make sure you pick the right one for you.

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A current account is a type of bank account that lets you receive money from anyone, including your wages from your employer. 

You can also use it to pay bills, withdraw cash, spend on a card or make payments to other people. You may get access to an overdraft and some banks will even pay interest on accounts in credit.

Here is how they work and how to get one.

What can you use current accounts for?

You can get a current account from any bank or building society as long as you meet the eligibility requirements. 

They’re designed to look after your incoming and outgoing money such as your monthly pay and bills.

You can pay money into them by:

  • Having your wages paid in*

  • Having any benefits, pensions or other income paid in*

  • Receiving bank transfers from other people or from companies

  • Paying in cash or cheques

You can take money out by:

  • Setting up automatic bill payments through direct debits or standing orders

  • Withdrawing money from a cashpoint

  • Paying for things in person or online with your debit card

  • Sending bank transfers to companies or other people via internet or telephone banking

*Many employers only pay wages by bank transfer, meaning you need a bank account to receive your salary, benefits or state pension

Your account has a balance, which is the amount of money in it. When you pay money in, your balance increases; if you spend money, it decreases.

Many accounts have an overdraft, which is a feature that lets you spend more than you have in your account, although they are often expensive.

How overdrafts work and how much they cost

What is your account number?

Each current account is identified by an account number, which is usually eight digits long. It also has a six-digit sort code to identify your bank and sometimes the branch you use. The combination of the sort code and account number is unique to your account.

How to open a current account

You can open a current account:

  • Online, which is often quickest

  • In person at a branch, which can be the safest way to hand over identification documents

  • By completing an application form and posting it to your bank

  • By phone

You will need to complete an application form with your name, address and other personal details. You may also need to provide documents to prove your identity. You bank may ask for:

  • Proof of name, such as a passport or driving licence

  • Proof of address, such as a utility bill or bank statement

You can get current accounts from banks, some building societies and other companies like prepaid card providers. You can find one using our current account comparison guides.

If you already have a bank account and want to move to a new one, here is how to switch accounts quickly and easily.

Is a current account the same as a debit card?

Not quite. Current accounts are bank accounts, but come with a debit card, which lets you withdraw money from a cash machine and make purchases:

  • In person, such as in a shop or restaurant

  • Online

  • Over the phone

  • By mail order

If you pay online, by phone or by mail order, you need to provide your 16-digit card number and other details like your card's expiry date and security number.

If you pay in person, you can verify the transaction with your PIN or signature, but the majority of cards now offer faster contactless payments.

Your debit card spending may come with some protection if things go wrong. Here is how the Chargeback scheme works.

How does internet banking work?

Most bank accounts let you access them online by signing in using a browser or an app for your tablet or smartphone. You can use this to:

  • Check your balance, transactions and statements

  • Make bank transfers to people or companies

  • Set up, cancel or amend direct debits and standing orders

  • Contact your bank with a secure message

Here is everything you need to know about online banking

What types of account are there?

You can choose from a range of different types, including:

Accounts with benefits and features

  • High interest accounts pay monthly or annual interest on the balance held in your account

  • Overdraft current accounts let you borrow money when your balance falls below zero, these often come with fees

  • Reward current accounts offer benefits with the account like cashback on your spending or bill payments, but they sometimes come with fees

  • Packaged current accounts offer perks like travel or phone insurance, but they come with a monthly or annual fee

Accounts for your circumstances

How to work out which current account is right for you

What current accounts cost

Most bank accounts are free if you use them carefully and avoid using your overdraft or exceeding its limit.

Core costs to be aware of include:

  • Monthly or annual fees for keeping some accounts open. These accounts usually offer features like bundled insurance, cashback or high interest rates on your balance. You can avoid these by switching to an account without the added perks.

  • Overdraft interest, which is charged when you use your overdraft facility and don’t pay the full lot back before the end of the month. Some accounts let you use a small buffer overdraft for free. Here are the different overdraft rates you may have to pay.

  • Fees for withdrawing cash or spending abroad on your debit card. Here is how much it costs and your alternatives.

  • Private cash machines sometimes charge you fees if you use them. Most banks' cash machines are free to use.

  • Failed direct debits or standing orders fees are charged when there is not enough money in your account for a bill payment to go through. Banks can charge you up to £25 when this happens.

You may also be charged if you request the following from your bank:

  • Copies of old statements

  • Sending money by CHAPS, which is a same day bank transfer that can cost up to £35.

  • Sending a banker's draft, which is a cheque written by your bank to a payee of your choice

  • A written reference from your bank

Who can get a bank account?

They are usually only available if you live in the UK and have a permanent address. Some bank accounts are only available if you are over 18, but others are designed for children aged 11 to 17.

Some accounts with perks only accept you if you can pay in a minimum amount each month, so you would need to earn enough money to qualify and keep the benefits.

Most banks run a credit check when you apply, which means they look at your financial situation before they decide if they can accept your application.

However, banks also offer basic bank accounts, which have no overdraft but do not require a credit check.

How to use your new bank account

Once you have opened a current account, here is how to manage and use it so you make the most of its features and avoid having to pay fees.

You can make your account as secure as possible when you send payments, use internet banking, withdraw cash or spend on your debit card. Here is how to keep your banking safe.

New bank accounts are offered all the time, so compare all of the best options to make sure you get the right one for you.

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