Current Accounts

How does a current account help me manage my money?

Current accounts have some or all of the following features to help you manage your day-to-day transactions:

Cash (ATM) card - lets you get cash from your account through cash machines, at your bank or building society branch and by using cash-back facilities at, say, supermarket tills.

Cheque book - lets you make a payment from your account to someone else

Cheque guarantee card - makes cheques up to the guarantee limit widely accepted because the person you're paying gets their money whether or not you have enough in your account

Debit card - this works like an electronic cheque. When you pay by debit card, the money is automatically taken from your account

BACS payments - people who are paying you (for example, your employer) can transfer money direct into your account

Direct debits - payments made on a regular basis (for example, for your gas and electricity) can be taken directly from your account each month

Standing orders - you can arrange for a payment to someone to be made direct from your account on a regular basis (for example, an allowance to a student son or daughter).

Some current accounts pay interest on money you leave in the account, but the rate is usually low. Aim to transfer any surplus to a savings account paying a better rate of interest. Internet accounts often offer higher rates than branch-based accounts.

Can anyone open a current account?

In theory, yes. However, banks and building societies may turn you down if they are unhappy about your creditworthiness although many let you overdraw to some extent. A bank or building society could not normally recover debts run up by a person under age 18. So the accounts available to children are usually savings accounts with, in some cases, a cash card and occasionally a debit card, but no other current account features.

If you are adult but not confident about keeping control over your spending, you could ask to have a current account with limited features, (called a basic bank account or introductory account) for example:

cash card - so you can take money out at a cash machine or your branch;

and debit card - with some types of card, your account balance is checked before each use. The purchase goes ahead only if there is enough money in your account. Make sure you ask for this type of card.

This sort of account would still allow people (for example, your employer or the Department for Work and Pensions) to pay money directly into your account and allow you to be able to pay regular bills by direct debit. A basic bank account does not let you borrow, so a bank should be willing to open such an account without checking your creditworthiness.

 

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