Current Accounts

What is a current account?

A current account is a bank or building society account designed for day-to-day money management. You can pay money in, spend using a debit card, set up Direct Debits and standing orders for regular bills, and withdraw cash.

Unlike a savings account, a current account is built for frequent transactions rather than earning interest. Some accounts do pay a small amount of interest or offer rewards, but the main purpose is convenient access to your money.

Common features

Most current accounts offer a similar core set of features:

• A debit card for spending in shops and online and for cash withdrawals
• Online and mobile banking to manage your money at any time
• Direct Debits and standing orders to pay regular bills automatically
• Faster Payments to send and receive money, usually within seconds
• An arranged overdraft on some accounts (this is borrowing and has a cost)

Types of current account

There are several types of current account designed for different needs:

• Standard accounts — no monthly fee and the essential everyday features
• Packaged accounts — a monthly fee in return for extras such as insurance; only worth it if you will use the benefits
• Basic bank accounts — a fee-free option with no overdraft, designed for people who cannot open a standard account
• Student and youth accounts — often with an interest-free overdraft or incentives

Choosing the right account

The best account depends on how you actually use your money. Look at any monthly fee and whether the benefits are worth it, the cost of any overdraft you might use, the quality of the banking app, and how easy the provider makes it to get help when you need it. Remember that switching is free if an account does not work out, and whichever provider you choose your money has FSCS protection up to £120,000.