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What to look for in a current account


A current account is where most of us keep the money we’ve earned and access those funds either by using our groceries on our debit cards or getting money out of the ATM. Such accounts are the most widely used financial service, so it is important to choose the right one for you.

So what should you be looking for?

Interest Rates

If you pay your pay cheque into your current account, then many banks will pay you interest on the money you save with them. This rate is described in terms of AER (Annual Equivalent Rate), which is the average percentage of interest your money will earn over a year – the higher the better.

On the flip-side, if you organise an overdraft with your current account, then you will pay the bank interest for any money you borrow from them. This rate is described in terms of APR (Annual Percentage Rate), which is the average rate of interest you will pay to the bank on that loan of money over a year – the lower the better.

As banks are required by law to display the interest rates in terms of AER and APR for their accounts, it is relatively simple to compare the various accounts available.

Account fees and premium extras

Most basic current accounts are free, but banks also tend to offer premium features with some current accounts for a monthly fees.

The fees can range from as little as £2 per month for accounts with cashback offers and improved interest rates, such as Santander’s 123 current account, to other premium features such as mobile phone insurance, exclusive discounts, holiday insurance.

Student accounts and graduate accounts include many of the premium extras for free, as banks hope that you will keep using their services after you graduate.

Debit cards

When you use your debit card in a shop or online, the transaction is processed as either VISA, MAESTRO, or VISA Electron. When in the UK, it may not make much of a difference, but when abroad it is generally safer to have a VISA card as it is accepted almost anywhere.

Online banking and mobile apps

People are doing their banking online or with mobile apps more and more these days, and that trend is only going to continue. All UK high street banks offer stable and relatively easy to use online banking services, but if you plan on making use of their mobile apps – make sure that they have one available for your phone’s platform. Most banks have iOS (Apple) and Android apps available, but if you have a Windows Phone, Blackberry you may not be so lucky.

Branches

As people move towards doing more and more of their banking online and through mobile apps, fewer of us are going into branches in person. However, every now and again you may receive a cheque from grandma or need to make a personal query, and going into a branch may be the only option. Therefore, it is worth checking that your bank has a branch local to your home or office.

Photograph by Tristan Martin

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