Choosing a current account that is perfect for you can be quite a tricky, time consuming thing to do. The financial market is so competitive these days, with so many “great deals” around that it can be hard to identify the right account for us when it comes to choosing a new current account. Follow our top 10 tips guide to choosing a current account to make your choice easier and clearer.
Do you like to have an overdraft facility? If so, look for an account that can give you a good deal on overdraft interest charges, as some banks can charge a high rate for having an overdraft. If you don’t want one, be sure to point that out at the time of setting your account up to avoid any unwanted fees.
2. Shop around
Banking is a highly competitive market these days, but by knowing exactly what you want from your account, then shopping around to get the best deal, you can be sure you are really taking care of your money. Use comparison websites to help you to get the best deal possible.
3. Do you need extras?
With current accounts comes a range of other extras for which you will pay an extra fee each month for. But do you really need these extras? Things like mobile phone insurance, car breakdown cover and travel insurance are all regular add-ons for our current accounts, but often these can be found cheaper elsewhere. Do your homework and research before agreeing to an account with these extras added on, as the additional cost may far outweigh the benefit of having them on your account.
4. Online or in person?
Some current accounts and banks ONLY function online whilst others allow both online and in the actual high street bank branch. Be sure to choose the type of banking account that completely fits your purpose when choosing which bank to open your current account with.
5. Know your limits
Several banks offer accounts with lots of extras and benefits, but these accounts usually require you to have excellent credit and a certain amount of money being paid into the account on a regular basis. There is usually a fee for these accounts but the extras (providing they are useful to you) can be a great addition. Just be aware of the monthly charge for these types of accounts, and ensure that you can meet the minimum monthly deposit requirements.
6. Check the charges
Different banks have different charges related to current accounts. For example, some banks will charge you for using your debit card at another branch. Some will NOT charge you for being overdrawn for a certain length of time, whilst others may charge a very high rate indeed. It is absolutely worth finding out what charges your chosen account has on it, to avoid nasty financial surprises further down the line.
Often these can be a gimmick to persuade you to open a current account at a certain bank. But some of these incentives can be very useful indeed. Some banks, providing that you mean certain conditions and criteria, will offer a cash lump sum for opening an account with them, whilst others will offer great benefits to students such as money off vouchers etc. Always read the small print to make sure that the incentives are actually of benefit to you.
8. Credit balances
If you like to run your account by constantly staying in credit, and NOT using an overdraft facility, it would be a wise move to find an account that offers high interest rewards on credit balances. Better in your pocket than theirs!
9. Credit rating
If you have a bad credit history, for example; if you have been bankrupt, it does not mean that you cannot have a bank account. Most banks offer a basic, no frills type of bank account and this may well be ideal for you. They usually offer no (or very low) overdraft facility, and they have no extras attached, meaning no bank charges. These accounts are perfect for someone who wishes to rebuild their credit rating.
10. Wrong choice?
Don’t despair if you find that you are unhappy with your chosen account or you find that it is not right for you. Switching your account to another bank couldn’t be easier. Your new chosen bank will do all the work for you, including the switching over of all your regular payments and direct debits, so do not feel that once you have chosen, you must stay. If you find a good deal at another branch, switch it.
It’s your money, so make it work for you.