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Bank accounts available

Jafar Hassan
Written by Jafar Hassan, Content editor

Edited by Chris Wheal, Finance Writer, 6 May 2022

Learn about the bank accounts available on the current account market today and see if you can find the right one for you.
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Bank accounts available

What are you looking for in a current account? You may wish to get a better return on your savings, pick up some rewards with your main bank, or simply find a bank or building society that gives you the service you want.

Your current account bank account is the account you use the most regularly – whether it's a personal current account or a business bank account. So it pays to make sure you are getting the best deal. Uswitch can help you find the best bank account for your needs by comparing the deals on the market.

Find a better bank account

Compare bank accounts from a range of providers and find a bank that works for you.

Compare bank accounts

Whatever you're looking for, read our guide to learn about the numerous types of bank accounts available on the market. See what features could benefit you and what others ones you may not need at all.

You can switch current account in seven working days, under an agreement between banks. If you want to take advantage of this service it's known as the CASS guarantee (Current Account Switch Service) and all the administration will be done by your new bank.

This admin includes, moving over your current account balance, direct debits, salary payments and standing orders. You have to close your old bank account under this fast-track service. Any mistakes or charges are sorted out by your new bank, so it's a good service and should make switching hassle-free.

Changes to bank overdrafts

From April 2020, new rules introduced by the financial watchdog, the Financial Conduct Authority, changed the way overdrafts were structured. The rule change was designed to make the costs of overdrafts clearer and easier to compare.

However, although the overdraft rules make comparison easier, the cost of borrowing money via your current account has actually risen for a lot of customers.

Under the new rules banks can't charge more for an unarranged overdraft than an arranged overdraft. This is when you dip into the red without organising an overdraft in advance or you go beyond your agreed overdraft limit. The regulations also mean that the banks must charge a single rate of interest on an overdraft and they can't add on other extra charges.

For some people, this has saved them money. But for others it has meant that the size of their overdraft has been reduced, and the penalty for going over the overdraft limit has meant much higher interest rates. The government set a cap on interest at 40% and most banks have set their rate at 39.9%.

Although banks are under pressure to help customers who have been affected financially by Covid, this usually means that you need to contact your bank and explain your circumstances if you need help with your overdraft.

What bank accounts are available to compare via Uswitch?

Customers today aren't only faced with a plenty of providers offering different current accounts; they're also faced with a choice of account types.

Most banks and building societies will have a standard day-to-day current account for holding your income and withdrawing cash. But they're also likely to have a suite of other accounts, ranging from the savings account to the packaged account with premium benefits.

Before you start comparing providers, read our guides to find out more and make sure you can get the current account to suit your needs and your lifestyle.

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.

Find a better bank account

Compare bank accounts from a range of providers and find a bank that works for you.

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 once you have exceeded a free overdraft amount.

In terms of interest paid on credit balances, standard current accounts offer a little or no interest on money saved in the account, so aren't the best choice for savers.

You can compare current accounts with Uswitch and find an account that works for you.

High interest accounts - better returns on your savings

High interest accounts fulfil the same everyday banking function as current accounts, but offer higher rates of AER (the interest a bank will pay to you for your deposit) than the typical standard current accounts.

However, often you will only receive this interest rate if you meet a provider's conditions, such as paying minimum monthly deposits into the account or paying an annual fee. You will also need to use this account as your regular current account and not as a secondary savings account.

It's also worth watching out for how long you'll receive the higher rate of interest, as some accounts only offer this as an introductory special offer for around 12 months.

Basic accounts - helping you manage your money

Basic accounts are similar to a current account, but are designed for those with a less than perfect history with managing credit or for those who want the absolute minimum.

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 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 likelihood of being given a current account in the future. The best basic bank accounts don't charge a fee for running the account.

Savings accounts - earn money while you save

Savings accounts are aimed at customers looking to build 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

Your bank may also have an Individual Savings Account (ISA) which allows you to accumulate tax-free interest. Like regular savings accounts ISAs could come with similar restrictions on the amount of withdrawals you can make or how long you have to keep your money there

However, it is possible to find ISAs and regular savings accounts that provide you with instant access. This means you can access your money whenever you like, but this will impact the rate of interest you get at the end of the month.

Usually the restricted savings accounts can offer better rates. Our varied list of guides will offer more information about ISAs and savings accounts.

Packaged accounts

In return for a monthly fee, some bank accounts will offer a premium account or packaged account that gives you some perks along with your usual banking.

These perks usually include products such as, mobile phone insurance, breakdown cover and travel insurance. They can also cover entertainment benefits such as, film rental, music downloads and executive airport lounge access.

Aside from these benefits, some packaged accounts may offer preferential rates for other banking products such as, loans or mortgages.

One of the issues around COVID-19 is that fewer people are travelling on business. Therefore, they're less likely to need the travel insurance, airport lounges and other perks that normally come with premium or packaged current accounts.

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 you 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.

As your current account and savings balances go up, you pay less on your mortgage. As they go down, you pay more. These accounts do require careful money management to ensure you're paying off your mortgage and not wasting your savings.

They were more popular in the past when people had to pay tax on their savings interest. Now with the introduction of the Personal Savings Allowance from the government, basic rate taxpayers can earn up to £1,000 in interest before they have to pay any tax. 

This has reduced some incentive to have an offset account, because in the past interest and savings rates were higher and interest on savings accounts was taxed. Often, interest paid on savings is lower than the interest charged on mortgages so offsetting makes financial sense.

Find out more about current accounts and compare offers. The Uswitch bank accounts comparison tool can help you search for bank accounts, and current accounts that are best for you. You can also use the Uswitch business bank account comparison service to find a business bank account that works for your needs.

Find a better bank account

Compare bank accounts from a range of providers and find a bank that works for you.

Read more ...

  • Current Accounts: Your Essential Guide From Uswitch
  • Opening a new current account
  • Switching your current account: step by step