Current accounts

A current account is for you if you get regular payments such as wages, salary, benefits, tax credits or pensions and you need regular access to your money, or you want to make payments by cheque or credit card.

What you can do with a current account

With a current account you can:

  • receive payments directly into your account
  • pay cheques into your account – pound sterling cheques are free to pay in and take four business days to clear
  • withdraw cash and check your balance at a cash machine and Post Offices
  • set up Direct Debits and standing orders to pay your bills and
  • apply for an overdraft allowing you to spend an agreed amount more than you have in your account – although you may be charged for this facility

You can access most current accounts through a high street branch, online, using mobile banking or over the phone.

Current accounts that offer more

Some current accounts offer extra services for which they may charge a one-off or monthly fee – these are often referred to as packaged accounts. Extras can include:

  • interest payments on your money or preferential rates on loans
  • car breakdown cover
  • cashing foreign cheques, and/or
  • insurance cover, such as life, travel or mobile phone insurance

Can anyone have a current account?

Did you know?

In the UK, 90% of adults have at least one current account.

Source: Office of Fair Trading, 2008

You need to be over 16 to open a current account, although for some banks the minimum age is 18. If you are under 18 you may be able to open a current account with your parents’ help. Banks may ask you to pay a minimum amount into your account every month, usually from wages, benefits or a pension. This is more likely if the account gives you interest on the money you have in it.

How much does a current account cost?

As long as you have money in your account, you do not usually have to pay for account services, although packaged accounts include charges.

Overdrafts and current accounts 

An agreed overdraft is a way of borrowing money from the bank through your current account, allowing you to spend more than you may have in your account. Banks may charge you interest or a fixed amount for lending this money; the interest is often at a higher rate than a personal loan. However, some offer interest free overdrafts.

Banks can charge higher fees if:

  • you spend more than you have in your account without arranging an overdraft, or
  • you go over the agreed overdraft limit

You can find out more about overdrafts by following the link below.

Cash machines (ATMs)

Withdrawing money from a cash machine at a bank or Post Office in the UK is usually free.

  • Private cash machines, such as those found inside shops, will charge but will ask you to agree the fee before you withdraw your cash.
  • A credit card, store card or charge card issuer may charge you to withdraw cash.
  • You may be charged to withdraw cash while abroad.

How to get a current account

Most banks and building societies offer current accounts which you can open on your own or with someone else (a joint account).

How to open a current account

You can usually apply in person, by post, over the phone or online.If your application is turned down, don’t be afraid to ask why – the bank should be happy to discuss this with you.

Watch our video - How to open a bank account

Alternatives to current accounts

It is possible to manage your money without a current account.

Basic bank accounts

If you have a poor credit record or no credit history (perhaps because you’ve moved to the UK or not borrowed in the past) but need a bank account to receive your wages, pension, tax credits or other kinds of benefits or payments, most banks - and many credit unions - will offer a basic bank account.

Need an account for your Universal Credit payment?

If you’re getting ready for the introduction of Universal Credit from April 2013 onwards, follow the link below to find out what your account options are and the pros and cons of each one.

Savings accounts

A savings account will pay you interest on your money and may allow you to use cash machines to withdraw your money or may provide a passbook.

Sharia-compliant accounts

Designed to run in accordance with Islamic law these accounts provide similar features and offer a return on your money which is not interest.

Managing your current account

Watch our video - How to make payments using your bank account

Checking your balance regularly will help you to make sure there’s enough money in your account to cover any standing orders or Direct Debits – so you don’t pay charges for having them rejected.

What to do if things go wrong with your current account

If there is something about your bank or building society that you are unhappy with, always try raising the issue with your bank or building society first. For other options for making a complaint read Sort out a money problem or make a complaint