What you need to know about Current Accounts

Most people in the UK have at least one current bank account, some may have a couple for different purposes or maybe you have a neglected pre-historic account that was opened for you when you were 10 years old. Either way it is well worth taking a look and seeing if your current accounts need an overhaul.Having a spring clean of your accounts is always a good idea every now an again to clear away the cobwebs and make sure you are getting the best deal for your money.

To start with there are 4 bog standard types of current accounts:Online accounts

Quick and convenient, these are proving to be more popular than ever before. Access to your money 24/7 and no queues during your lunch break. They are probably the best invention since cash machines hit the high street.

Packaged accounts

Also know as fee-paying accounts. These have been designed to try and extract more cash from their customers. The customer 'upgrades' their current account and pays a monthly charge for the privilege. This can be between £10 and £25 per month, which adds up to a few hundred pounds a year. Generally it looks like you are getting a great deal, improved service and extra perks but in reality most people do not take advantage of the offers available which can sometimes be expensive and may be found cheaper elsewhere. Watch out.

Student accounts

If you are planning to go to Uni or have just started, make sure you switch to a student bank account. They will generally offer cheaper rates of interest on overdrafts, free banking, and some even offer free gifts such as MP3's, annual rail cards and shop discounts. Make sure these are worthwhile and not just gimmicks. Being a student is hard work mentally as well as financially, so find the best deal you can to make life easier.

Basic accounts

If you are unfortunate enough to have a bad credit history, have been declared bankrupt or have a minimal income you will probably be unable to open a normal current account, so a basic bank account is the only choice available for you, but they are useful and easy enough to open. You won't be able to have a cheque book or an overdraft but you will be able to access your cash with a debit card. You can then have any income paid directly into it and any bills set up as direct debits or standing orders.Once you know what account you are planning to set up or switch to follow these simple tips on what to look out for:

What is the rate of interest?

The obvious first thing to look at with any account is how much interest they will pay you whilst your account remains in credit. These vary between banks and building societies. Current accounts generally aren't high interest accounts but you can move money into a higher interest savings account whenever you want to.

How convenient is the location and hours of opening?

This may be of concern if you don't have an online account and if you live far away from your nearest town, do you have transport? Sometimes it's easier to have access to a bank that is close to where you work. If you have an online banking account set up you don't generally need to worry because you can access anywhere and at anytime.

Paying Bills and setting up services

Make sure your bank or online account will allow you to transfer or set up direct debits and standing orders to allow you to start or continue paying bills automatically. This avoids payments getting lost in the post or forgetting who needs paying, especially when you are away on holiday.

What additional charges are there?

If you need to set up an overdraft what are the charges of interest you will have to pay? Will there be an administration charge to pay? Enquire about the charges for unauthorised borrowings. They are usually higher than they should be but some banks will really try and milk it.

Recommendations and reliability

Has someone advised you on a good bank? It can really vary between individuals as to the quality of the service they are getting. Pop into a branch and see for yourself, are the staff polite and friendly, can they answer all your questions and do they have a good and quick customer service? For online accounts, make sure the website is quick and easy to use.

Good luck in finding the best current bank account for you and your hard-earned money.