Choosing the correct bank account

Most of us tend to take our bank accounts for granted, and we don’t stop to think how we would manage our finances if we had no banking facilities. In actual fact, trying to manage without a bank account is extremely hard, and makes something as simple as paying a bill a real chore.

This is why it is important that you have the right bank account for your needs and circumstances, as this can help to ease financial issues and make managing your finances far easier.

There are a number of major and smaller banks and building societies in the UK that offer a choice of banks accounts based on your eligibility.

You may find that you are eligible to apply for any of these banks accounts, or you may find that the bank will only allow you to open a particular account. This is something that can vary from bank to bank. Below are some frequently asked questions relating to bank accounts in the UK:

What are the different types of bank accounts available these days?

There are three standard bank account types available these days, although availability will vary from one bank or building society to another. This includes the basic bank account, the current account, and the premier account. These accounts are often known by bespoke names from one bank to another but provide the same sorts of facilities.

What’s the difference between these three types of accounts?

Although all three bank accounts perform the same basic functions there are some key differences in both facilities offered and eligibility requirements. The basic bank account is often offered to those with poor credit, no credit, or those that have come to the country to work and need to have their salaries paid into an account.

With the basic bank account you can pay bills, withdraw cash using a cash card, and set up direct debits and standing orders. You can also have your salary paid direct into the account. However, usually there is no debit card or cheque book facility, and no overdraft facility with these accounts.

A standard bank account will enable you to do the same as a basic bank account but also offers debit card and cheque book facilities. Often there is also an overdraft facility available with this account, subject to status.

The current account is the most popular type of bank account, which many people use for their day to day financial management.  A premium account is much like the current account but offers a number of benefits in exchange for a monthly fee.

This includes preferential rates on overdrafts and loans, travel insurance cover, car breakdown cover, extended fraud cover, and more – although the benefits can vary from one bank to another.

How do I know which bank account is best suited to my needs?

This will depend on your needs and circumstances. If you have poor credit for example, you may only be eligible to apply for a basic account. If you feel that you could benefit from additional facilities such as those offered with the premium accounts, then you may find that it is worth the monthly fee (which is around £10 per month on average) to have one of these accounts.

If you simply want a bank account that enables you to conduct day to day transactions with added facilities such as debit card and overdraft then a current account could prove ideal.

You should make sure that you read up on each account with any bank that you are considering so that you know exactly what you will get, as this will help to ensure that you end up with the right account for your needs.

Do I get anything for opening a bank account?

This will once again depend on the bank that you go through. The world of banking has become increasingly competitive over recent years, and many banks will offer freebies and incentives in order to entice new customers.

You will often find that banks offer cash incentives to new customers, and it is worth looking out for these if you are considering switching banks or opening a new bank account. Student bank accounts often offer other benefits such as discount cards, vouchers, entertainment tickets, etc.

How do I apply for a bank account?

The easiest way to apply to open a bank account is online, and many banks offer online applications facilities these days, making it faster and easier to make your application.

However, if there are no online facilities available for making your application then you may need to call the bank or building society to have an application form sent out or complete it over the phone, or you may prefer to visit the branch and complete your application form.