If you’re looking to save more money and get savvy with your finances, this superb section dedicated to UK bank accounts could be the ideal place for you.
Our expert money team are regularly updating this website, with the latest information, discounts, bank deals and account offers. Meaning our commitment to helping members of the UK public remains constant and resolute.
In this section there’s also a wide range of additional topics and guides from Switching Bank Accounts, Opening a Bank Account with a Poor Credit History, Best Current Accounts, Student and Graduate Accounts and lots more! As already stated, this website gets updated frequently, so check back on a regular basis, you never know, you may just save yourself money in the process!
How to Choose the Correct UK Bank Account?
If you’re attempting to decide which British bank account best suits your needs and requirements, this page is ideal for you. After all, we all lead different lives, so what may be correct for one person, may not be correct for another. This guide will help you to understand the pros and cons of each major account type and help you to comprehend all the features available.
UK Current Accounts – This typically the most common account in the United Kingdom. You can open current bank accounts at major banking organisations and building society’s. This type of account is designed to manage every day-to-day finances, such as paying bills, direct debts, standing orders, accepting salaries, wages or benefits.
They usually also have overdraft facilities too, however these will need to be authorised by your provider. Current accounts mean you’ll also have access to pay for things in person, online or over the telephone via your debit card. You can also use a debit card to withdraw money from cash machines (ATMs). Most banks will also let you view, transfer money and check your account via their own banking websites and secure ‘mobile apps’. You can also set up text messages and alerts to warn you if your balance gets too low.
Packaged Accounts – Generally a packaged bank account is similar to a current account, however it usually includes ‘special offers’ or ‘add-ons’ as standard. Of course, these don’t always come for free, extra features will normally include a charge of around £10 to £15 per month. Some banks may charge more (read all the terms and conditions before opening an account).
Some of these additional features may include Car Breakdown Cover, Insurance Cover, such as travel insurance or mobile phone cover. Some providers may also offer special interest rates on overdrafts and so on. As stated, all providers are different, so read all of the terms.
Basic Bank Accounts – These types of accounts are usually ideal for people who can’t open a standard current account. Normally they’ll be used by people who’ve been bankrupt or have a poor credit history. A basic bank account generally means you won’t have access to credit facilities such as overdrafts or credit cards. It’s a place to pay any of your bills, such as council tax, utility bills, direct debits and standing orders. It’s also an account to receive payments such as wages, salary or benefits. Please click on the link to learn more about Opening a Bank Account with a Poor Credit History.
Jam Jar Accounts – These accounts can also sometimes be known as a ‘budgeting’ account. They’re designed to help people to budget their money. Normally you can divide your money into different ‘jars’ or ‘pots’. Typically, you decide how much goes into each pot by calculating how much you need for bills, shopping and so on. Jam jar bank accounts will also allow you to receive money such as your salary, wages or benefits. They also let you pay any bills, standing orders and direct debits. If you’re having trouble managing your money, take a look at our Monthly Budget Planner, this tool has been designed to help you understand your monthly incomings and outgoings. It even tells you where you’ve overspent!
Joint Bank Accounts – This account is usually popular among couples, as they’re designed to be access by two or more people. Joint account holders can include married couples, civil partners and couples who live together. Sometimes they’re also used by housemates who share expenses, such as the rent, utility bills, council tax and so on. Similar to current accounts, a joint account means the holders can pay bills, withdraw money, have wages paid into the account and more. However, it’s important to note that sometimes it may require more than one person to agree to certain parts of the account.
Children Bank Accounts – Basically a kids account work in a similar fashion to an adult current account. You can pay money in and make withdrawals at cash machines with a debit card. You can’t get an overdraft facility or any form of credit, such as a credit card. This obviously means that a child won’t incur interest or other charges. Normally you can open a child bank account from the age of 11 to 18, however, some organisations may offer accounts to kids as low as 7 years-old. Equally, other providers may only offer them to children who are 16 and older. In most cases, a parent or legal guardian will have to open an account for anybody under 16.
Credit Union Accounts – These types of accounts may be ideal for people who’ve had trouble opening a basic account or favour to manage their money with a non-for-profit organisation. Typically, a credit union is a co-operative, that is designed to help the members and the community. They usually offer standard services such as saving, current accounts and loans. People sometimes favour credit union banks because you don’t usually have to pass a credit check, as they don’t normally provide overdraft facilities. Remember to join a credit union, you usually have to have a ‘common bond’ with the other members. This can be anything from working for the same company, living in a specific area, attending the same church and so on.
Student Bank Accounts – In most cases, a standard UK current bank account isn’t ideal for most graduates and students. For the best ‘deals’ and offers’, take a look at our dedicated Best Student Bank Accounts or Best Graduates accounts for further information. Remember banks and building society’s generally offer attractive incentives for students and graduates, this is to try and secure them as ‘long-term’ customers.
Comparing Account Fees and Features
At the end of the day, Banks are in business to make money. They generally make their money through charging their customers interest and fees for using their services.
Typically bank fees and charges can vary between each provider. Equally, some banks and building societies may offer ‘low’ fees and charges if you’ve got a good credit history or have joined them as part of an introductory offer.
In most cases, the highest bank fees are related to spending more than your agreed overdraft limit. However, some banks will charge monthly fees just for processing basic things such as utility bills, direct debits, wages and so on.
Therefore, it’s important you don’t get ‘comfortable’ with your current provider (unless they have offered you a preferential rate). As you’re a customer, you should be attempting to get the best deal for your own needs, and after all, the banks need your business so make them work for it.
As in-store banking is declining and its getting harder to visit local branches in person, the customer service element of banking is changing. This means a lot of providers offer a similar service, you either bank via the telephone, internet or mobile banking or in some cases by post. As the branch services continue to decline, you can attempt to seek better incentives and deals for your custom.
With the seven-day switching scheme, it isn’t hard to change from one provider to another. However, with any deal or inventive be aware of all terms and conditions and any ‘future’ strings attached. Typical ‘deals’ can include low interest rates for a limited period, cash incentives, monthly credit and more. As we all have different circumstances, it’s up to you to decide which is best for your needs.
Understanding Bank Cards
In England, bank accounts will generally issue you with a standard debit card. This will allow you to buy shopping, clothing and other goods with money already in your account. There’s also a few other types of cards you should be aware of:
Debit Cards – As previously mentioned, you can use your debit card online, in person or to withdraw money from a cash machine. Debit cards are not a credit facility, meaning you can only withdraw the amount you have in your bank (or up to your limit if you have an overdraft).
Credit Cards – These types of cards differ from a debit card, as they allow you to purchase goods and products using money which you may not have in your current account. Typically, your bank will need to approve you for the use of a credit card and not everybody is accepted. Your bank will set a ‘limit’ in which you can spend up to, this can be hundreds or thousands of pounds. Normally you’ll have to pass a credit check to get a credit card. Remember its recommended to pay off a credit card balance in full before the end of each month, in most cases you’ll be charged interest if you don’t. For more information and the latest deals and offers, please visit our Credit Card section today.
Prepaid Cards – These work in a similar fashion to pay-as-you-go mobile phones. Normally you can only ‘spend’ the amount you put on. If you attempt to spend more than your prepaid card balance, your card will be rejected, and no payment will be made. Prepaid cards generally charge a fee when you ‘top up’ – if you’re planning to use it on a regular basis, a basic bank account may be better for you.
Store Cards – Don’t get store cards confused with bank debit cards. These are generally high-interest credit facilities and are similar to a credit card. Sometimes they may be ‘issued’ or ‘administrated’ by a banking organisation, however, you can’t sign up for a specific store card at a local bank. They’re only available in the store in question.