What to Look for In a Current Account

Current accounts are a type of deposit account most banks offer that let you complete everyday transactions, such as wiring money, withdrawing money from an ATM and depositing your paycheck. Options and features vary, though, so you'll likely find it helpful to get what you should keep an eye out for with your current and internet current account explained.

Overdraft Protection: Ideally, people would never overspend from their current accounts, but the reality is that mistakes happen. The fact many people in the United Kingdom (and other nations) fail to make and stick to a budget properly is a big part of the problem, as not tracking expenditures and income well makes it difficult to determine whether there is enough money in the account to cover the next purchase. If your budget is extremely tight, or if you have trouble adhering to budget tasks, then overdraft buffers might help. They let you overdraw your account by a specified amount before the financial institution charges you extra fees or interest.

Fees, Charges and Penalties: Some of the current account features you'll see will be free, but others will have fees. For example, you might have to pay to replace your ATM card or get a new pin number. Many banks charge service fees for things like direct debit, as well, and it is also routine to get hit with a charge for letting your account go negative unless you have an overdraft buffer. Your goal when looking for a good account is to keep the amount you pay to have the account as low as possible, so examine where your money could leak away and don't get an account that charges for things you do all the time. Ask if the bank has a special package with reduced or waived costs for groups you might fall into, such as being a student or a senior citizen.

Account Minimums: In some cases, you will have to keep a specified amount of money in a current account in order to avoid penalties or keep it active. You might also have to keep depositing a certain amount every month. As explained by FindABetterBank, banks do this because it costs them money to operate your account. They need to recoup these costs and, hopefully, make at least a small profit. By requiring a minimum, they have more money available to loan, which lets them make more in interest. They also have more to invest. Internet current accounts are less likely to require account minimums, because they don't have to make up the overhead costs associated with a physical, brick-and-mortar branch.

Ask if the bank will waive the minimum if you do most of your transactions electronically or use direct deposit. It's also worth it to investigate options at banks where you already have other types of loans or accounts. Representatives might look at your history with the bank and decide that you should be rewarded for your loyalty or consistency. Interest RatesOverall, putting money in the bank so it can draw interest is usually not the best investment, but you still can make a little money off the account if you have a decent balance and a competitive interest rate. The objective here is simple: Get the highest interest rate you can. Be aware that the introductory rate of interest that might tempt you to get the account isn't necessarily going to be static over time, however. Check what the bank's interest rates have been like on average to get a better idea of which institution likely will be the best bet over the long haul.

Flexibility: The best perks and features in the world won't do you much good if they're a pain to access. For instance, maybe there's no fee for your debit card, but you have to drive all the way across town just to get to an ATM that won't hit you with a surcharge. Another example is having your bank consistently closed when you're off work. Banks that let you access your current account online, by phone or other mobile device, or in person offer more flexibility, but look into customer service ratings, as well.

Conclusion:There is no one size fits all best choice when it comes to current accounts. You have to look at your own habits and preferences to decide which one will work for you. Even so, looking at basic factors such as potential fees and the flexibility offered can steer you in the right direction.

Sam Jones the author of this article regularly studies the financial market and recommends to people looking for a website to get internet current accounts explained to visit uSwitch.com.