A Current Account helps you manage money going in and out on a day-to-day basis. This type of account usually offers an overdraft facility but will charge severe penalties if you fail to repay what you borrow, or go over your agreed overdraft allowance.
Most banks and some building societies offer a current account - this type of account allows you to manage money going in and out of your account on a day-to-day basis.
Current Accounts will usually provide a card that allows you to pay for items without cash (this is called a debit card). For more information click here.
This type of account also allow automatic bill payments direct from your account (these are called direct debits). They also give you the option to pay regular set amounts from your account to someone of your choice (this is called a standing order).
Choosing a current account
A guide, "How to find the best current account", is available at this link.
Which? provides a series of comparison tables, to help you identify the best current account for you. To use the tool, follow this link.
Managing your account
These accounts allow you to check your balance and withdraw cash from a cash machine. Most provide an online banking facility allowing you to check your balance, transfer money in and out and set up regular or one-off payments.
For more information on paying money out of your account click here.
For more information on paying money into your account, click here.
Many current accounts pay interest on money you leave in the account, but usually the rate is very low.
The bank may allow you to go overdrawn (to spend more money than you have in your account) up to a certain amount -this is called an overdraft, for more information click here.
However, banks will charge interest when you go overdrawn (meaning you have to pay back more than you borrowed whilst you were overdrawn). Additionally if you go overdrawn without authorisation, or you go beyond your overdraft limit – banks will charge fees as well as interest.
For more details on current accounts, including the ability to compare common features of current accounts against basic bank accounts and savings accounts, click here.
Guides to Current A/C Basics can be found at money.co.uk.
Packaged Accounts
For a monthly fee, packaged accounts offer you benefits like travel insurance, preferential rate overdrafts and more. But these extras aren’t always worth the fee. For a detailed guide on Packaged Accounts, follow this link.
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