Current accounts

A current account is great for managing your day-to-day money. You can receive regular payments such as wages, benefits, tax credits or pensions into your account, and set up payments out of your account in whichever way you find convenient.

• What you can do with a current account
• How much does a current account cost?
• How to get a current account
• Managing your current account
• What to do if things go wrong with your current account

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 – sterling cheques are free to pay in and take six business days to clear
• Pay for things with a debit card
• Withdraw cash over the counter or from a cashpoint machine
• Check your balance using telephone or internet banking, at a cash machine or over the counter
• Set up Direct Debits and standing orders to pay your bills
• Write cheques to pay bills and individuals
• Transfer money via telephone or online banking services
• Apply for an overdraft allowing you to spend an agreed amount more than you have in your account

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

Who can get a current account?

• Over 16. 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. If your child can’t open a current account you might want to look at savings accounts for children as some banks offer accounts that the child can access from the age of seven.
• Minimum monthly payment. Banks may ask you to pay a minimum amount into your account every month, usually from wages, benefits or a pension.
• Good credit history. Because many current accounts allow you to have an overdraft facility, you might need to pass a credit check when you open the account.
• Proof of identity and address. All banks or building societies will ask for proof of your identity and address before you can open a bank account.

How much does a current account cost?

As long as you have money in your account, you don’t usually have to pay for current account services.

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 usually 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.

You could be charged higher fees if:

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

Transaction fees if your overdraft is unauthorised

If you go over your authorised overdraft limit you may be charged for every cash withdrawal or cheque or card payment you make, even if the bank doesn’t allow the payment to go through. These fees can be £10-£25 for each transaction.

You may also be charged for refused Direct Debits and standing orders – see below.

Charges for refused Direct Debits and standing orders

If there’s not enough money in your account to cover a standing order or Direct Debit it may be refused and you will usually have to pay charges. It can be as much as £25 for each refused payment.

Find out more about how to use Direct Debits and standing orders without paying charges:

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.

You will usually be charged to withdraw cash from your current account while abroad.

How to get a current account

How to choose a current account

Comparison websites are a good starting point for anyone trying to find a current account tailored to their needs.

We recommend the following websites for comparing current accounts:

• Go Compare – This also allows you to use the government-backed Midata tool to securely upload your past transactions for customised current account recommendations.
• Moneyfacts
• Money Saving Expert
• Money Supermarket

Remember:

• Comparison websites won’t all give you the same results, so make sure you use more than one site before making a decision.
• It is also important to do some research into the type of product and features you need before making a purchase or changing supplier.

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.

Watch our video - How to open a bank account

Read a transcript of this video

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. The bank or building society must investigate your complaint and give you a clear answer within eight weeks.

If the company doesn’t send you a response within eight weeks or you’re still unhappy, you may be able to complain to the Financial Ombudsman Service.