In this modern world, bank accounts are one of the most critical elements that allow individuals to successfully manage their finances. Obviously, there are numerous institutions that provide these services and each will offer certain benefits as well as drawbacks. It is therefore a good idea to take a look at a few basic metrics that should be considered when choosing to open up an account at a specific bank or financial organisation.
Types of Bank Account
There are a number of different bank account types. The most typical bank account that you will come across is the current account which allows customers to deposit and withdraw money.
Standard current accounts usually give customers chequebooks, debit cards, overdraft facilities and online and telephone access to their account. In addition, customers can receive periodic statements detailing their incomings and outgoings.
The most basic type of current account is called a simple cash account. There are no chequebooks, online facilities or overdraft arrangements. Customers go to the bank to withdraw and deposit their cash. Following a Treasury deal, banks will offer these accounts to those with a bad credit history as it will give them the opportunity to get their finances back on track instead of accruing further debt.
Children’s accounts are designed for children and tend to work more like a savings account. Children are not usually allow a debit card, but may be allowed a cash card to withdraw money from ATMs and the bank.
Student accounts are geared towards students and offer incentives and good overdraft rates. To find out more, please visit the Consumer Adviser student bank account page.
Student accounts get upgraded to graduate accounts once the student has graduated. This type of account offers good interest rates on financial products such as mortgages and loans.
Saving accounts are a type of bank account which is geared towards saving; they have favourable interest rates and there are sometimes restrictions on withdrawals. These accounts come in both fixed rate and variable interest rate forms.
These types of accounts allow more than one individual to pay in and withdraw money from an account. This account is commonly used by couples, housemates and business partners.
Choosing the best bank account
It is very important to consider the interest that will be earned on any deposited funds. A long-term savings account will offer the best rates, although the money may not be as easy to access (and early withdrawals may incur penalties). A normal debit account will earn considerably less interest although the funds can be accessed immediately through any cash point. Of course, different banks will offer slightly different rates. So, it is a good idea to compare and contrast levels of interest online; these will be extremely clear.
It is also best to opt for a service that provides secure online access to an account at any time of the day or night. Institutions such as Secure Trust Banks (and countless others including HSBC and Barclays) will include this amenity as part of their standard packages. Thus, an account can be effectively managed during times when it may be difficult or impossible to visit a local bank branch.
This is a lesser-known benefit that all customers need to be aware of. The reason that multiple currency options are important (especially for those in the United Kingdom) is the fact that banks tend to provide more amenable exchange rates than would be found elsewhere. Thus, an account should be able to support all major currencies such as the euro, the dollar and the pound. In fact, some customers will actually transfer from one currency to another when conditions are favourable; of particular importance when travelling abroad.
Above all, an institution should offer several forms of customer relations. These will need to include email, phone and fax services. Should any problem occur, it can therefore be dealt with quickly and easily.
Best Free Standard Current Accounts
|Provider||Debit Card||Online Banking||Mobile Banking||Telephone Banking|
|Everday Current Account||✔||✔||✔||✔||More Information|
|Halifax Current Account||✔||✔||✔||✔||More Information|
|Barclays Current Account||✔||✔||✔||✔||More Information|
|Classic Account||✔||✔||✔||✔||More Information|
|Select Account||✔||✔||✔||✔||More Information|
*information verified at time of publishing (18/11/2014) but may be subject to change