Most people need to open some sort of current account to manage their day-to-day banking.
For example, if you’re in work, your employer will probably want to pay your salary directly into your current account. The same applies to any state benefits that you might receive, including the state pension.
You might also want to set up direct debits or standing orders to sort out your household bills.
You usually have to be 18 to open a bank account, though some banks and building societies offer accounts to people over the age of 16. Most accounts can be run online so your bank is effectively open 24 hours a day, seven days a week – and no queues.
You can also expect a debit card that you can use to make payments or withdraw cash from an ATM.
Most accounts can be run online so your bank is effectively open 24 hours a day
Range of current accounts
Most banks and building societies offer a range of different accounts so it’s worth taking the time to consider your banking needs.
For example, if you always have spare cash in your current account, you could opt for an account that pays interest on credit balances.
If you are more likely to need an overdraft, check out the fees and charges as some overdrafts are more costly than others. A number of accounts also offer rewards such as cash back, which can be useful if you are a big spender.
Watch out for current accounts that charge a monthly fee, often referred to as ‘packaged’ accounts. They include a range of add-on benefits such as travel and gadget insurance and can be worthwhile if you make full use of the additional extras.
But it is important not to duplicate cover – for example, you might already have travel insurance, or might never travel. Many people are better off with one of the wide choice of free current accounts.
It’s also worth bearing in mind that many current accounts insist that you pay your salary into the account. Some also impose a minimum monthly funding requirement.
In other words, you must pay in at least a certain amount each month. If you don’t comply with the conditions, you could be hit with a penalty fee.
Opening a current account
It’s easy to open a current account. You have to fill in an application form, either in person, over the phone or online. The form is pretty straightforward and only takes a few minutes to complete.
Money laundering regulations require the bank or building society to ask for proof of identity, such as a passport or driving licence, as well as proof of your address, often in the form of a utility (gas/electricity/water) or council tax bill.
Most banks and building societies carry out a credit check when you apply to open a current account because using an overdraft is a form of borrowing. Your application could be turned down if you have a poor credit history.
However, anyone with a low credit score can apply for a ‘basic’ bank account. There is no overdraft facility with a basic bank account so you do not need to pass a credit test.