What is a Current Account? A current account offers a safe place to store your day-to-day money. Most people will be able to open a standard current account, which will offer a chequebook and a cash card, making it easy to get to your cash and spend what you like. Most accounts will also enable BACS payments, so you can receive money transfers into your account. Some will also offer overdraft facilities, enabling you to borrow if needs be. Unfortunately, many people seem to overlook the fact that a current account also offers a way to gain interest on your cash.
Basic Account For those of you who need to avoid the temptation of spending, or if your credit history is not so great, basic accounts are also available, which do exactly what the name suggests and offer a no frills facility. Usually this account just offers a cash card or maybe a debit card, which does not let money leave your account before checking the balance. Basic bank accounts do not offer an overdraft.
Start Paying Attention! Too many people do not pay enough attention to the current account market. As a result, they either end up losing hundreds of pounds by sticking with low interest rates, or they end up paying very high rates on their overdraft facility, which can be around 18% or more! There are two main things you can look out for when choosing a current account.
If you know the cash in your account is going to be topped up regularly or increase steadily over time, then start taking advantage of the high interest rates. Watch out though, some interest rates may only be on offer for a set period of time, for example six months after you open the account. After this, your rate may drop considerably or it may start to track the Bank of England Base Rate (BEBR), which can go up or down throughout the year. Others may apply until you have reached a certain amount in your account, for example £2,500.
However, if things are a little tight, and you may need a helping hand now and again, you might be better off looking for an account with a cheap overdraft facility. When it comes to overdrafts, the best advice is also the most simple – avoid them altogether! But if you are going to be in the red now and again, there are accounts which will be better suited to your needs. While some accounts may offer overdrafts on an interest free basis until you hit an agreed sum, others may provide an overdraft rate for a set period of time, particularly if it is part of an introductory offer to entice you in.
Students and Graduates Many banks and building societies also offer student or young persons accounts. These aim to give young people some practice in managing money – and can be very profitable for banks if students spend more down the pub than they should do. There are likely to be various incentives for students, including interest free overdrafts and gifts such as dvds, cds, gig tickets, books or travel cards.
Graduate Accounts are also available to people leaving university and usually extend some of the student perks over a 3-year period to help you manage and repay debt.
Abbey Days For Bank Customers - New Santander Zero Current Account In keeping with the model for the Zero credit card introduced by Abbey its Zero Current Account promises not to charge flat fees for customers using an unauthorised overdraft.
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Current Accounts With X-Factor Traditionally, current accounts were simply designed as a means to house money that you needed to use on a day to day basis. They offered little in terms of in-credit interest – that was the role of a savings account – and they certainly didn’t attract customers with supplementary insurance products or perks. There are a number of accounts, though, that will offer a ‘package’ of products in exchange for a monthly fee.
Alliance and Leicester Offers 100 Pound Bonus for Customers Switching Current Accounts The most tempting current account offer staring this week is from the Alliance & Leicester. Anyone opening an A&L Premier Current Account will receive a £100 cash bonus deposited straight into their account.