Piggy banks

How to find the best bank account for the different stages of life

As we grow up, what we want from our banks changes, and these financial institutions have different products aimed at helping us through the various stages of life from school to retirement. Here are a few elements of bank accounts to look out for at each level.

Your first bank account

Most banks require customers to be over 18 years old to sign up for a standard bank account in the UK, but there are various accounts designed specifically for children aged eleven and above from most the major high street banks and some online-only options as well.

To sign up, a child will generally need the help of a parent or guardian, and it may be worth going into a brand to discuss your options or you can compare the various possibilities online. For young children, an account may not come with a debit card or cheque book, so you can compare the various accounts simply on the interest (AER) they pay, but for teenagers will also be worth exploring the debit card and possibly the overdraft options too.

University or college student accounts

Banks are generally clamouring over themselves to attract new customers at 18 as they go to university, as they know that many people keep the same main bank account for life. Therefore, student bank accounts often come with some of the best incentives from free rail cards or mobile phone insurance to thousands of pounds of interest-free overdrafts.

Incentives like free railcards or discounts at restaurants are great, but it is best to focus on what is really important to you, whether this is the size of the overdraft available, the interest rate you will receive on any savings, or the cost of using your debit card when abroad – all of which offer more value than a £30 railcard over the long term.

Joint accounts

As you move into the real world, you may find that it is easier to share account with your partner, where you can both pay in some money every month and then spend on the things you do together, from weekly food shops to house bills or holidays. Everyone is different in how much they choose to pay into a joint account and how they choose to spend that money, but one feature to look out for is “spaces”, which let you put aside money within the account for specific purposes.

Perhaps you live together, and so have a separate space for household bills, or you are planning a holiday and so want to put aside some money for that, or maybe you just want a “fun fund” to put away some money for a splurge. Some high street banks are starting to offer these features, but it is common amongst the app-based so-called challenger banks and can prove very useful on a joint account.

60+ and retirement accounts

As you head towards retirement, your priorities change once again. You may no longer receive a wage from your job, but instead you should be benefitting from your pension, both state and private, and looking to make the money you have earned over your lifetime to do the work for you by finding the best savings accounts for over 60s. Where you put your money will depend on the amount available, with some accounts offering higher interest rates for larger sums, and your appetite for risk, but keep an eye on how easy the money is to access and how long it may be needed to be locked away for the best returns.

Photograph by Low Jianwei

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