Types of Bank Accounts
There are several different types of bank account, the most common being a straight forward current account, although even these do vary.
Basic Bank Accounts
A standard bank account is the most popular current account and is used by most of us. It’s the simple one that you can pay in and draw out from, with cheques, debit cards and ATM’s. Your salary is most likely paid directly into this account.
You can arrange an overdraft with this type of bank account and even make international transfers should you ever need to. Some banks will even pay you for having a positive balance, although you may need to maintain a minimum balance of around £1,000.
You’re able to choose whether you prefer to access your account via the telephone, in branch or online and some banks will allow all three provided you have set up the various levels of online banking security.
Fee Based Bank Accounts
You’re probably thinking why would I want to pay for my current account when I can get one for free? Current accounts that require a monthly fee usually offer you additional benefits, such as free travel insurance, a car breakdown service and free mobile phone insurance, so it is worth checking them out. Remember though, it’s only a benefit if it’s saving you money elsewhere.
Some fee based bank accounts also offer cash backs or money off your utility bills. Pre-agreed overdraft limits and approved credit cards are often included too, so comparing your choice of current accounts is a must!
High Interest Bank Accounts
These do exactly what they say, they pay a higher rate of interest on your money should you maintain a minimum balance in the account, typically around £1,000.
Watch out for limits on the high interest rate though as you may find it dropping to a much lower rate at a certain point. Banks are very clever at marketing a high rate for you only to find out that it just applies to the first £2,500 in the account.