Bank accounts available
Customers today are not only faced with a large number of providers offering different current accounts; they are also faced with a choice of account types. Before you start comparing providers, let uSwitch.com talk you through the account types available and what they can offer you.
Current accounts - the day to day account
Most of us have a current account to manage our money on a day to day basis. We pay our income into the account and then manage payments such as bills, Direct Debits and standing orders from the account. Current accounts give you easy and quick access to your money and usually come with a cheque book and a debit card. If you need access to extra funds, either temporarily or over a longer term, your provider can offer an overdraft facility for you to borrow against. Most current accounts will charge interest against the borrowing, although the interest rate charged varies from provider to provider. Generally current accounts offer a low rate of interest on money saved in the account, so are not the best choice for savers.
Providers also offer current accounts which levy a monthly charge to customers. In return customers receive benefits such as reductions on loan rates, free insurance and discounts on goods.
Compare current accounts available and find the best account for you.
Basic accounts - helping you manage your money
Basic accounts are similar to a current account; customers can pay their wages or benefits into a bank account and can access their money either by using a cash card (with an agreed withdrawal limit) or at the bank's branch.
Basic accounts will not allow customers to have an overdraft or a cheque book, so suit those who want to control their spending and stay in credit. Basic accounts are also an option for customers who have had issues with credit and may not be eligible for a current account. By setting up a basic bank account and managing it effectively customers can increase their likelhood of being given a current account in the future.
Savings accounts - earn money while you save
Savings accounts are aimed at customers looking at building up a cash fund either for a special occasion, such as a wedding or for the future such as saving for children's university costs.
A savings account can be opened from a wide range of providers and generally require the customer pay in a sum of money each month. These accounts often give a higher rate of interest than a normal current account, but are less flexible. Restrictions can include:
- Keeping money in the account for a certain period of time
- Paying in a minimum or maximum amount each month
- A restriction on the number of withdrawals you can make
Offset - combine your mortgage and banking
An offset mortgage links your main current and / or savings accounts with your mortgage. Each month, the amount you owe on your mortgage is reduced by the amount in these accounts before working out the interest due on the loan.
So if have an interest only mortgage of £200,000 and have savings in your offset account of say £50,000, you pay interest on £150,000.
However if you spend £10,000 in the next month you will have reduced your offset account to £40,000 and pay interest on £160,000.
So, as your current account and savings balances go up, you pay less on your mortgage. As they go down, you pay more.
These accounts, while becoming more popular, do require careful money management to ensure you are paying off your mortgage and not wasting your savings.
We understand bank accounts
Getting the best bank account for you should not be about guess work. uSwitch does all the hard work to find the best current account available for you - and we don't stop there, we help you open or make the switch online. Helping you all the way.
Find the best current account for you