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Choosing the Right Current Account

in Banking, Current Accounts

For most of us our current account is the one we use every day without even thinking about it. It’s the account into which our salary is paid and from which we pay our direct debits and standing orders. This is also the bank account most of us use to pay our bills, shop with a debit card and withdraw money from the cash point.

But, because our current account is so much part of our daily routine, there is a danger for most of us that, because we haven’t taken the time to think about it, we’re not getting the best deal available to suit our particular needs. This brief guide, therefore, is intended to help people who want to make sure they are getting the best account on offer, or for people who are perhaps opening an account for the first time.

What Kind of Account Do I Need?

We’re all different and we all use our current account in different ways. If you are someone who always stays in credit, come what may, it’s worth looking at accounts that pay you interest for doing so. If, on the other hand, you regularly, or even just occasionally, allow your account to slip into the red you should be looking for one that offers the best overdraft facilities.

Take a few moments to look through your bank statements for the last six months or so. What patterns do you see in the way you spend your money over the course of each month? In particular, are you or are you not always in credit?

If You Are Always in Credit

There are a number of accounts on the market that pay you interest if you always remain in credit. The interest this money sitting in your current account can earn will potentially mount up over the course of the year.

Look for an account that offers you interest but does not charge you a fee, otherwise you risk undoing any advantage you gain from receiving that interest. Also check the small print to see if the rate of interest on offer is a time-limited incentive, for an initial twelve months for instance.

Some accounts with interest place an upper limit on the amount for which you receive the best rate of interest. If this is the case with your chosen account, it may be sensible to divert a set amount each month into a savings account in order to gain a better rate of interest on it.

If You Need an Overdraft Facility

Be honest with yourself, do you regularly end up overdrawn with your current account? Is the way you manage your account a little unplanned, haphazard even? If this is the case, it is likely that your bank will be charging you a lot of money for privilege of allowing you an overdraft.

It would be far better, in terms of managing your money, to search out an account that specifically provides you with an agreed overdraft facility. There are accounts that allow you the facility to go overdrawn without charging any fees or interest, but these are often very restrictive when it comes to the amounts and time-scales that are allowable. Therefore, you may find that an account with an agreed low-interest facility, but no fees, is far better to help you manage your money.

How Do I Switch Account?

So you’ve looked into the kind of account that best meets your needs then you’ve been online to check what’s available and make your comparisons. You’ve chosen the account that matches your preferences. What do you do next?

Banks want your business, so most of them will offer a service to help you transfer your account to them, including moving any direct debits. But don’t forget to give your employer your new account details, so that your money arrives where you intend that it should.