To go about comparing current accounts, you need to keep in mind certain basic criteria that will help you find the best current account for you:
- Determine the interest rate ? The balance of the credit available in your current account will fluctuate based on how much interest you will earn from maintaining that current account. Compute for the average balance you generally maintain from month to month. The majority of UK banks will permit you to transfer funds from your current account to a high-yielding savings account, if you prefer that. Online current accounts allow this to be done quite easily. Other UK lenders even have a stipulation that a certain amount from your current account will be deposited into the higher-yielding account at a certain time.
- Be aware of charges for overdrafts ? Overdrafts mean you have withdrawn more money than is actually available in your current account. When you do this, you might incur charges from your bank. Unauthorised overdrafts are particularly expensive to absorb. Some lenders permit you to increase the limits of the amount by which you can be overdrawn though.
- Find out if online banking services for current accounts are available 24/7 ? There are certain banks who turn off their online banking services at graveyard hours (like, from midnight to 6 or 7 am) so that they can have maintenance work done on their online banking system. Night owls who prefer to bank online at night may find this inconvenient for them, so be sure to ask about this before you agree to house your funds at a given bank.
- Ask about online statements - Ask if the bank will provide bank statements online on a continuous basis. Some lenders do supply online bank statements but only for a certain period. Other banks only post online bank statements for the current month. Be sure which applies to you.
- Find out about online bill payment - Ask if the bank allows online bill payments using funds from your current account. Most banks even provide an automatic bill payment option to take the burden of having to remember to pay your bills each month off of you.
- Look for a bank that permits you to manage standing orders via the online banking system. If you opt for a direct debit arrangement, do not forget to finalize the direct debit arrangement with the company you will be paying.
- Is the bank service oriented? When you ask many questions about their banking services (including those to help in finding the right current account for you), are the staff polite and knowledgeable, or do they act like they prefer that you leave them alone? Little things like this are warning signs that maybe you should try finding the right current account for you elsewhere.
- Does the bank operate wrap or aggregate accounts? This service allows the bank to post all your online accounts (including current accounts) on the same webpage of their online banking service. This makes online banking quite convenient because you only need to remember one username and one password to access all your accounts. However, if someone with malicious intent manages to get that username and password set, they will have unlimited access to all your online accounts. So if you request for the wrap or aggregate accounts service, be prepared for this risk.
- If you are a student, it may be advantageous for you to get a current account which is called a student account. You should be concerned primarily about interest rates and borrowing limits offered in the student account.
Other Aspects of Finding the Right Current Account for You
- Overdraft charges ? Usually, charges are deducted from current accounts when you are overdrawn. In that case, your lender may charge you either a penalty fee, more interest based on the amount of your overdraft, and/or another fee for cheques, direct debits, or standing orders that are sent back.
- Access charges ? If you use your current account via the international banking system, your lender might issue a charge for this as well. This may apply if you a) rely on a debit card to get cash from ATMs overseas, b) use travelers cheques to buy items, c) exchange British pounds from your current account into foreign currency, or vice versa, or d) cash a cheque from foreign banks.
Finding the right current account for you takes knowledge, patience, and sometimes a bit of luck as well. Take your time when deciding which account to go with, so that you know you'll be getting the best deal available.