How to choose the best current account
From student and joint accounts to high interest and cashback accounts, our guide can help you decide how to choose the best current account for you.
Key takeaways
Choosing the right current account is essential for managing your finances effectively
Some accounts offer high interest or cashback on spending while others offer overdrafts and basic free services
Some accounts offer cash or gift cards as a switching incentive
You rely on your current account every day – to receive your salary, pension or other payments and to pay your household bills. But there are different types of current account and what’s ideal for one customer might not suit another.
Our guide will help you make the right choice when it comes to selecting the best current account for you.
What should I consider when choosing a bank account?
You use your bank account on a regular basis so you should be happy with how it operates and the features it provides. You also want it to work for you. Questions to ask include:
Does it offer perks and rewards, such as high interest or cashback on spending?
Will it provide a low cost overdraft facility in case you need to borrow money?
Does it have smart banking features that help you budget and keep track of your spending?
How much will I pay if I use it while abroad?
Does it charge a monthly fee?
Do I want an individual bank account or a joint account with my partner?
Is there a switching incentive such as cash or gift cards when you sign-up?
Does the account give you access to perks like exclusive savings accounts or insurance policies?
Can you have two current accounts?
There’s no rule to say you can’t have more than one current account and often having two or more can be a benefit.
You can use different accounts for different types of spending for example, such as a current account with a local branch for your mortgage, an online account where you receive your wages, and an app-based account for low-cost overseas spending.
Just be aware that the more accounts you have, the harder it is to keep track of them all, so it’s usually better not to have too many.
What are the different types of current accounts?
There are several different types of current accounts. We look here at how they work, give you the pros and cons for each and suggest who they are most suitable for:
A joint account is a way of sharing a bank account between two or more people – usually yourself and your partner, or others you live with.
Advantages :
Makes it easy to manage household finances
May allow you to keep a healthier bank balance and earn more rewards or interest
If you opt for a packaged account, you only pay one monthly fee
Disadvantages:
You must trust your joint account holder with your finances
You’ll be jointly responsible for any overdraft debt – even if you didn’t spend the money
Your credit history is linked to the other account holder, and could be negatively affected
This account could suit someone who is in a trusted relationship where both account holders are open and responsible with their finances.
A high interest current account pays high interest rates on in-credit balances. It may be for an introductory period only, tiered, and/or up to a capped amount.
Advantages:
Allows you to earn interest on your balance
There may be a switching incentive, such as cashback, gift cards or insurance
May provide a linked savings account with a competitive interest rate
Disadvantages:
High interest rates can be introductory and end after 12 months
The amount of interest you can earn may be capped
These accounts often comes with monthly fees and high overdraft charges
This account is ideal for someone who keeps a healthy bank balance and doesn’t dip into an overdraft – meaning they can maximise any interest earned from the account.
These current accounts may give you rewards and cashback when you to spend. Rewards can differ from loyalty points to insurance. Cashback can also come in different ways, such as being paid on your household bills or when you shop at selected high street retailers.
Advantages:
Earn cashback or rewards
Rewards may be linked to your favourite shops
You can often get a reward simply for switching to the new account
Disadvantages:
There may be a monthly fee to pay
You may have to deposit a minimum amount into the account each month to qualify for the rewards
Overdraft charges could be higher than on a regular current account
This account is perfect for someone who is a savvy shopper and enjoys keeping close tabs on their finances to take advantage of any rewards or incentives when they arise.
A basic bank account is a no-frills account that has all the standard banking options but doesn’t provide an overdraft facility – so you can’t use it to borrow money.
Advantages:
A way for customers with bad credit or no credit rating to open a bank account
You can't spend what you don’t have
Can help prove you have a regular income and improve your credit rating over time, eventually allowing you to upgrade to an account with an overdraft and other benefits
Disadvantages:
It doesn’t offer an overdraft
Doesn’t offer as many perks and rewards as some standard current accounts
Often won’t pay interest on the money you have in the account
A basic bank account may be the only viable option for those with bad credit who cannot get a regular account. Basic bank accounts may also suit those just starting out or who have moved to the UK and haven’t had the chance to build their credit rating.
Student bank accounts work in the same way as standard current accounts but usually they come with extra features, such as larger interest-free overdrafts and perks such as discount railcards and shopping vouchers.
Advantages:
Often provide interest-free overdrafts to help manage your student finances
Incentives can be better than regular accounts
Offer smart banking facilities making it straightforward to handle your finances from anywhere
Disadvantages:
You may struggle to get a student bank account if you’ve a poor credit rating
International students might not be eligible for a UK student bank account
You could lose some perks when you graduate and may be required to gradually reduce your overdraft
Tailored to students, these accounts are often ideal for those studying in higher education
Children’s bank accounts in the UK generally run from the age of 11 to 17 and differ slightly from regular current accounts with no overdraft facility, optional debit cards and parents having discretion to set withdrawal limits.
Advantages:
Helps your child learn about finances and handle their money
Can offer appealing perks such as discounts for driving lessons when they turn 17
Parental control can be put in place to manage spending
Disadvantages:
While the children might not always appreciate their parents being able to monitor their finances, there aren’t really any disadvantages with children’s bank accounts.
Perfect for teenagers and a great option to help kids start to understand how to manage their finances.
Types of current accounts
Joint bank accounts
High interest current accounts
Reward and cashback current accounts
Basic bank accounts
Student bank accounts
Children’s bank accounts
Which bank accounts can I apply for?
The eligibility criteria for a current account will vary depending on the bank and the account. Here are some things you may have to show before you can open one:
Be a UK resident
Own a smartphone (for app-based banking)
Earn a minimum amount each month (for premium accounts)
Have a good credit score (if there’s an overdraft facility)
How to pick a new current account
The current account you choose will be entirely personal however the following process will apply when you do so:
Make a list of what you need from your current account
Compare providers and accounts, paying close attention to the small print
Check the eligibility to make sure you can apple
Apply for the new account, if approved it will be set up
Other useful guides
For lots more information about current accounts browse our range of useful guides, including:
Personal Finance & Insurance Expert
Our expert says...
"It's important to think about what you need out of a current account before opening one. If you often have an in-credit balance, you may choose an account that’ll pay you interest, if you need to dip into your overdraft occasionally, you’ll want one with a cheap interest rate. The market is extremely competitive so you can also get paid cash bonuses for switching, but always look beyond the perks and freebies – especially at any fees included – before you apply."
Compare current accounts with MoneySuperMarket
It’s straightforward to compare current accounts with MoneySuperMarket and find the one that will best suit you.
Just tell us a few details about what you need from a bank account and we’ll show you a list of available current account deals.
You can then sort by overdraft deal and rate, best customer service or highest switch incentives before making your decision.
