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 whatever ways you find convenient.
Do you have more than one account? New services mean you can now see all your accounts in a single banking app. Find out more here.
With a current account you can:
Basic rate tax payers can earn up to £1,000 interest on their savings without having to pay tax and higher rate tax payers can earn up to £500 worth of interest tax-free. Find out more on Tax on savings accounts.
You can access most current accounts through a high street branch, online, using mobile banking or over the phone.
According to the FCA, people who use mobile banking app and text alert services incur 24% fewer unarranged overdraft charges.
If you don’t qualify for a current account, you should consider a fee-free basic bank account. We’ve pulled together a collection of guides, tips and handy links to help you pick the best one for you.
As long as you have money in your account, you don’t usually have to pay for current account services.
An agreed overdraft is a way of borrowing money from the bank through your current account, allowing you to spend more than you 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:
If you go over your authorised overdraft limit, you might 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 might also be charged for refused Direct Debits and standing orders – see below.
If there’s not enough money in your account to cover a standing order or Direct Debit it might be refused and you’ll 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:
Current accounts now have a Monthly Maximum Charge (MMC) in place, which is the maximum amount you’d pay each month in fees, charges and interest on unarranged overdrafts. It doesn’t affect authorised overdrafts, and the amount varies depending on the bank or building society, and which current account you have.
Make sure you check what the MMC is with your current account so you know how much your overdraft is costing you.
In the UK, taking money out of a cash machine with your debit card is usually free.
There are some exceptions:
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:
In Northern Ireland, you can also try the Consumer Council Comparison Tool.
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.
Banks and building societies all offer a free seven-day Current Account Switch Service.
It’s backed by a guarantee that means you’ll be refunded any interest and charges on your old and new accounts if anything goes wrong.
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.
If you’re unhappy with something about your bank or building society, speak to your bank or building society first.
They must investigate your complaint and give you a clear answer within eight weeks.
If they don’t send you a response within eight weeks or you’re still unhappy after they do, you may be able to complain to the Financial Ombudsman Service.