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Current Accounts: The Most Frequently Asked Questions

December 21, 2015

Read the most frequently asked questions about current accounts; see the answers, compare quotes and find the best deal to suit you.

How do I know which current account is best for me?

The most suitable current account for you will largely depend on your circumstances; this is because different products have different benefits and features. Choosing the right account could help you to keep in credit or boost the amount of interest on your funds.

You can find out more in our beginners’ guide to current accounts.

Is it easy to change my current account?

Since the bank account switch guarantee has been established it is now very simple to change to another product. Most of the work will be processed and completed by your new bank.

How do I change my bank account?

It’s very easy to change your account:

  • When you have decided on your new bank, inform your existing bank you wish to switch banks.
  • Provide two forms of ID and you will need to complete some new forms
  • Your new bank will then contact your current bank and begin the changeover.

Are you aware…?

    • There are 2 types of overdraft: authorised and unauthorised
    • If you are always in credit, your current account could offer benefits such as attractive interest rates and cashback
    • Children can open a bank account from the age of 11
  • Your new bank will ask you for details of any standing orders and direct debits you have that you want to transfer
  • Select a date on which the transfer will take effect.

Your employer will need to know your new bank and account details in order to pay you wages.

How does an overdraft work?

There are two types of overdraft: authorised and unauthorised. When you have an authorised overdraft, you will have set up a predetermined deficit amount with your bank; you will be charged interest upon this amount according to the terms.

When you have an unauthorised overdraft, it is when you exceed your credit limit or your authorised overdraft limit and you will go ‘into the red’. You will almost certainly be charged a high interest rate and penalty fees.

What does midata for current accounts mean?

Midata is a government-backed initiative; its aim is to improve personal finance comparison choices. When you use this for current account comparison, consumers can see the most suitable account choice for them based on their personal banking history, rather than on using a model analogy.

What is a basic bank account?

Basic bank accounts are good when you are setting out and you need to learn or re-learn about managing your money; they are perfect for people who prefer to keep things simple.

What is a packaged current account?

Packaged current accounts, often known as premium accounts, have additional features to a normal account; you usually have to pay a monthly fee for this.

Which current account is best if you are in debt?

If you are most often in credit, consider an account with an overdraft.

It’s best to keep away from unauthorised overdrafts; however, if you struggle to remain in credit, find an account that doesn’t charge too much for going into debit.

You could also look at product options for those with bad credit.

Which current account is most suitable for those with large credit balances?

If you deposit large amounts of cash into your current account on a regular basis, consider an account that pays a decent interest rate for credit balances; or look for one that offers other bonuses or rewards, such as cashback accounts.

Are there special current accounts for students?

Yes. The majority of banks will offer a student account which has specialist features from which students can benefit. After you have graduated from university, you may be transferred into a defined graduate account.

Can children have bank accounts?

Yes, this is possible. Children’s current accounts are available from the age of 11.

If most accounts are free, how do banks profit from them?

One of the reason banks offer free current accounts is because it is likely that most customers will go on to purchase additional products. These may be in the form of a credit card or a mortgage. Banks also profit when customers go into debit, via the interest charged.

Why is so much emphasis placed on having the right current account?

Current accounts are the accounts used most often by the majority of people. To get the most from the money you’re earning, it’s best to shop around for the right deal; there is no rule that says you have to remain with the same account or provider.

For answers to any further questions, see our current account guides.

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