Learn about the bank accounts available in the current account market today and see if you can find the right one for you.
What are you looking for in a current account? You may wish to get a better return on your savings, pick up some rewards or simply find a bank or building society that gives you the service you want.
Your current 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. See what features could benefit you and what others 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 Current Account Switch Service (CASS) 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’ll also have to change that to your new card yourself.
The Financial Conduct Authority (FCA) 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. An unarranged overdraft 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.
The FCA said that those who use an unarranged overdraft would be better off under the new rules or see no change but others are paying more as the rates on most accounts have been set at a relatively high 39.9%.
Customers today aren't only faced with lots of providers offering different current accounts - they're also faced with a wide choice of account types.
Most banks and building societies will have a standard day-to-day current account for having your salary or other income paid into, making payments and withdrawing cash. But they're also likely to have a suite of other accounts, ranging from savings accounts to packaged accounts 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 lifestyle.
Most of us have a current account to manage our money on a day-to-day basis. Your income is paid into the account and you can then manage payments such as bills, direct debits and standing orders from the account.
If you need access to extra funds – either temporarily or longer term – your provider can offer an overdraft facility for you to borrow against. Most current accounts will charge interest for the borrowing although some give you a free overdraft amount.
In terms of interest paid on credit balances, most current accounts offer little or no interest on money 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.
fulfil the same everyday banking function as current accounts, but offer higher AERs (the interest a bank will pay to you for your credit balances) than typical current accounts.
However, often you will only receive this interest rate if you meet a provider's conditions, such as making 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 bank accounts are a type of current account designed for those with a less-than-perfect history with managing credit.
Customers can pay their wages or benefits into a basic 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 standard current account.
By setting up a basic bank account and managing it effectively, customers can increase their likelihood of being given a standard current account in the future. 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, for the future, such as saving for children's university costs, or for emergencies.
A savings account can be opened with a wide range of providers and may have a minimum amount you need to pay in to open the account. These accounts usually pay a higher rate of interest than current accounts but are not designed for managing your money day to day.
Some have restrictions, which 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 will also usually offer an Individual Savings Account (ISA), which allows you to earn tax-free interest. Like standard savings accounts, ISAs can come with restrictions on the number of withdrawals you can make or how long you have to keep your money in them.
However, there are savings accounts that give you instant access to your money. This means you can access your money whenever you like but 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 offer entertainment benefits, such as TV subscriptions and cinema tickets, and executive airport lounge access.
Aside from these benefits, some packaged accounts may offer preferential rates for other banking products, such as savings accounts 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 the interest due on the loan is worked out.
So if you have an interest-only mortgage of £200,000 and £50,000 in your offset savings account, you’ll pay interest on £150,000. However, if you spend £10,000 of your savings in the next month you will have reduced your savings account balance to £40,000 so would pay interest on £160,000.
As your current account or 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 making the best use of 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 but as interest paid on savings is often lower than the interest charged on mortgages offsetting can still make financial sense.
Find out more about current accounts and compare offers. The Uswitch comparison tool can help you search for the current accounts that are best for you. You can also use the Uswitch business bank account comparison service to find a business account that works for your needs.