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.
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 accounts 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, but this too is done for you. The guarantee means any mistakes or charges are sorted out by your new bank, so it's a good service and should make switching hassle-free.
The service only covers the bank account, so if you have related credit cards and are taking out new ones as part of the move, these are not covered. If you have your debit card set up as an online payment method, such as with Amazon, you will also have to change that yourself.
The Financial Conduct Authority, changed the way overdrafts were structured in April 2020. The rules were designed to make the costs of overdrafts clearer and easier to compare. But the cost of borrowing money via your current account rose 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 can't add on other extra charges.
For some, this 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%.
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.
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.
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 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 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 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 to 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 the restricted savings accounts can offer better rates.
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.
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.
Many people stick with the same account their parents opened for them, but the 7-day current account switch guarantee could change all of that.Learn more