Trying to decide on the most suitable type of bank account that best meets your requirements is actually a lot tougher than it first seems. Whether it is your first account, second account or even if you are switching current account then hopefully this overview will help you.
Current Bank Accounts
These are the most common of all accounts offered by a bank or building society and are perfectly ideal for:
- Paying household bills using a Standing Order or Direct Debit or mandate
- Having payments automatically going into your account, such as your salary
- Paying for items when shopping on the street or online
- A pre-arranged overdraft to help with cash flow issues month to month
- Getting money out of a cash point
Premium Bank Accounts
Premium accounts, also known as Packaged Bank Accounts, come with added features or benefits which can vary a lot.
Typically, the banks charge a monthly fee for these extras, such as:
- Vehicle breakdown cover
- Travel insurance cover Mobile Phone insurance cover
- Preferential interest rates on overdrafts
Basic bank accountsThese accounts are one step down from a normal current account and are free of any fees. There will not usually be any possibility of an authorised overdraft so you need to keep a regimental check on your daily finances.
What you will be able to do is:
- Pay yourhousehold bills by Standing Order or by Direct Debit
- Have your salary paid directly into the account
These basic bank accounts are usually suitable if you suffer with a poor credit reference or will never require an overdraft.
These are very handy for those who really need to keep an eye on their finances for many different areas. You can apportion amounts of money for different things such as rent, clothing, holidays, specific bills, etc. You can even swipe parts of your salary into these mini-accounts after you have been paid and know you will at least have the money to meet the bills when they arise.
You may be charged a a monthly fee for this amount of flexibility though.
Student Bank accounts
Students can enjoy accounts with interest-free overdrafts. These accounts often come with some special features targeted at the needs of Students.
Banks often also offer attractive accounts to graduates to attempt to secure them as long-term customers.
The best thing to do is pop into a few of your local high street banks and building societies and ask them what they have to offer. After your visit to the first one you will suddenly become an expert! You can then go to the other establishments and ask more pertinent questions to help you make the right, informed decision.