Current Accounts

United Kingdom bank current accounts are day to day bank accounts where people can store their disposable income from wages etc, that they will use up in a relatively quick period of time. 

As with bank credit cards, nowadays there is a vast array of different bank current accounts with many different benefits and pitfalls associated with them.

The main types of bank current accounts are:

Cash accounts
Standard current accounts
Added value current accounts

Cash accounts are normally issued to people with financial problems, or new residents to the United Kingdom who may not yet have a credit profile in the UK. Cash accounts are as they sound cash only, no debit card is issued to the account holder.

The account holder will get a cash point card, which means that they can only spend the money held in their bank account. Normally a cheque book would not be issued to the account holder either, these accounts are a good way to create a credit profile with a UK bank.

Standard current accounts are normally where the account holder gets a debit card, cheque book etc. A debit card means the current account can overspend compared to how much money is held in the account but not by much.Most of these bank accounts will come with no monthly charge, and will offer users an overdraft facility (if agreed by lender).

Added Value current accounts, are as they sound bank accounts with additional benefits. These benefits can range from things like: Identity theft protection, mobile phone insurance, car breakdown cover, travel insurance etc. The account holder will pay a fee to have these types of accounts with prices ranging from £5 to £30 a month. If all the services offered by the account are used by the account holder, then these packages can offer good value for money.

Of course bank charges are an issue, with many claims now going into legal proceedings for miss-selling of pay protection inusrance, and also for overdraft and unpaid item fee's. Most bank accounts come with charges, so it is important to check to see what you will be charged for before opening any new bank account. 

Some accounts actually pay you to open an account with them, or to credit your account with your wages each month. This is a way for some banks to win your business and/or loyalty from other UK banks. At the time or writting Santander offered £100 to switch your main current account to them (subject to conditions) and the Halifax offer £5 per month if you credit a certain current account with them with your wages and over £1,000 a month paid in (again conditions apply). From time to time these offers change, so again it is worth checking out what accounts are on offer at the time you are looking.

It has further been suggested that most people do not move banks, they tend to stay with the same provider. This can end up costing customers lots of money in interest and rewards etc, as with car and home insurance it is always worth shopping around for the best deals on bank accounts, savings accounts, mortgages, loans, ISA's etc.

Make the banks work for your money and the more the banks have to fight to attract and retain customers the more competition there will be. More competition around the United Kingdom from the banks means better benefits for all of us, in terms of better interest rates and less charges etc.

Also don't forget that now you can get current accounts that are purely online and from many more unusual sources, so it is worth looking into the non high street banks as possible current account providers.