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About Current Accounts
If you’re interested in opening a new current account, or switching your existing one, there are plenty of options for you to explore and compare on the UK high street and online.
Current accounts from the high street banks remain popular, and offerings from online-only banks are also becoming more widespread. If you opt for an online-only bank account, you’ll almost certainly manage it through an app. This app may offer extra insight into your spending habits and behaviours that can help you with saving, budgeting and maybe even paying off debt.
The best UK current account for you will be one that offers everything you need to make your banking life easier. Have a think about what you’d ideally like your current account to provide. Do you want access to an arranged overdraft? How about mobile phone or laptop insurance, budgeting tools, or maybe even the ability to earn cashback on your spending? Some current account providers charge a small monthly fee in return for more specialised options, and this may appeal to you. But on the other hand, you may want a simpler service that doesn’t cost you to use it.
Compare current accounts from major UK providers, including:
What is a current account?
A current account is a bank account for day-to-day transactions, a place for receiving and paying money out. It may also be known as a personal bank account or a standard account.
The way it works is simple – just choose your provider and open your account. You’ll receive a debit card you can use to withdraw your cash. Any incoming payments – salary, wage, or benefits – will likely be paid into your current account, and you can set up regular outgoing payments, such as standing orders or direct debits, too.
How do I choose the best current account?
To choose the best current account for you, it can be helpful to compare different providers and products. You should think about how you may use the account, the features you want, as well as whether you want access to other banking services such as loans or overdrafts. You can then weigh up accounts from a range of providers to help choose one that best suits your circumstances.
Can I have more than one current account?
Yes, you can – there’s no limit to the number of current accounts a person can open and run.
How can I switch my current account?
The easiest thing to do is to use the Current Account Switch Service. This is free and takes care of everything for you – including switching over your direct debits and other active outgoing payments.
You can switch your current account yourself by contacting your old bank to close your account after opening a new one. However, this can be fiddly, and you’ll have to remember to transfer all your existing outgoing payments manually.
Some banks will offer potential customers money or similar incentives to switch to their current account, so make sure you research what’s out there as there are good deals to be had.
How do I open a current account?
To open a current bank account, first identify the best one for you. Then get in touch with the bank that provides it. They’ll check your credit history, as well as asking you for proof of identity and address. Documents such as a driving licence, passport, birth certificate, council tax or other utility bill, can cover this, but make sure you check what the bank specifically requires.
Many banks now offer online banking, where you can manage your account online – you can view statements, make payments, and check your balance, among other things.
Benefits of a current bank account
As well as the standard features you would expect from a current account – such as the ability to make and receive payments, to withdraw cash with a debit card, and to arrange an overdraft – some current bank accounts may also come with added benefits, such as:
- Budgeting tools
- Cashback and rewards
- Balance and overdraft alerts
High street or challenger bank?
High street banks are still the preferred option for most current account holders, but challenger banks and online-only current account providers are fast becoming popular with people looking to switch their current account or open a new one.
Online-only account providers often offer more insight into your finances through apps and other tech-based tools. They sometimes pay favourable interest rates, and people with poor credit ratings may find them easier to get approval for. Setting up an online account can also be quicker and easier than setting up a traditional bank account. However, some online-only current accounts may not have all the same features and services as a high street bank account. High street banks still provide in-person banking services at a branch, although even traditional banks are increasingly offering online banking and app-based mobile banking to customers.
What are the different types of bank accounts?
There are many different types of bank accounts available, catering to the needs of many different customers.
- Personal account: A personal account is just another name for a standard current account, from which you can carry out all your daily financial activities.
- Basic account: Basic accounts only give you the ability to pay money in and make payments from your account, with no overdraft or other enhanced features although it may be possible to add these once you have had the account for a while. They can help people with poor or bad credit to repair their credit score.
- High interest account: A high interest current account pays a higher rate of interest on your balance than is usual for current accounts.
- Packaged account: A packaged account comes with lots of added extras for which you pay a monthly fee.
- Joint account: Joint accounts are set up between two or more people. Each person is legally responsible for the money in the account, and can make deposits and withdrawals as they wish.
- Student account: Student bank accounts are made for people in further and higher education. They come with an interest-free overdraft facility and may also offer rewards such as free travelcards or subscriptions.
- Child account: Children can open their own bank account from the age of 11. They won’t get an overdraft, but even simple actions like paying money in and out can teach children good financial habits.
- Cashback account: With a cashback account you can earn money as you spend. You’ll get a small percentage back from your purchases, and possibly from monthly bill payments too, depending on your provider.
- Business account: A business account is an account solely used for business transactions. It’s handy for tax returns, as it keeps business and personal transactions separate, and may come with useful tools, too.
- Bad credit account: A bad credit bank account is also known as a prepaid bank account. Prepaid bank accounts only let you spend money you’ve already paid in.
Current Account FAQs
This depends on the terms and conditions of the account. Usually, as long as you have money in your current account and you use it regularly for your wage or salary, you won’t have to pay. However, some current accounts come with extra features or benefits, and there may be a monthly fee for these.
Yes, if you use the Current Account Switch Service. This is a free service that takes care of transferring all your payments and your balance to your new account, while your old bank will close your old account. You can also close your old account manually if you prefer, just by getting in touch with your bank.
It’s hard to say for sure how much cash you can deposit in your current account in any one transaction, as each bank may have a different limit but these should be outlined in your T&C’s. However you should note that for out of the ordinary deposits or large transactions above the region of £5,000, the bank may have to ask you some questions to check where the money came from. This may be uncomfortable for you, especially if you’re a long-term customer, but it’s not personal. It’s a legal requirement, due to tighter money laundering laws that were introduced in 2017 and 2020.
This depends on what type of credit card you have. Transferring money from your credit card to your current account is possible if you hold a money transfer credit card, which was created for this very purpose. Otherwise, you could withdraw cash from an ATM using your credit card, and then pay it into your bank account – but be aware that this can be very expensive, and you could be clocking up interest and other charges from the moment you take out the money.
Many UK banks allow a second authorised user (also known as an additional cardholder or a secondary signer) to be added to an existing current account, so check with yours to find out if this is possible, and if so, how to go about it. If the person you want to add to your current account doesn’t already bank with your provider, you may have to set up an in-person meeting and provide valid ID documentation to get your bank’s approval.
It’s easy to close your existing current bank account, and there are a couple of ways to do it. If you plan to switch to a new current account using the Current Account Switch Service, you can simply leave it up to them to also close your old current account.
If you’re not using the Current Account Switch Service, just get in touch with your bank and explain you want to close your account – they’ll be able to take care of it for you. Keep in mind that if you owe any money to them, for example through an overdraft, or other fees, you’ll have to pay it all back before you can close your account. And make a note to transfer any regular outgoing payments from the account you’re closing, to another account.
They can be – but only if you have earned a significant amount in interest on the money in your current account. In general this is up to £1,000 for basic-rate taxpayers, and up to £500 for higher-rate taxpayers. You may also be able to earn more interest tax free if you have a low income from all other sources. You should always check the latest tax allowances and consult with a qualified tax professional if unsure. However, as current accounts don’t generally earn much interest compared to savings accounts, it’s unlikely you will be taxed much, if at all, on the contents of your current account.
Yes, up to a certain amount. Your current account funds will fall under the protection of the Financial Services Compensation Scheme (FSCS) if the bank you hold funds with fails. This compensation is limited up to a total of £85,000 per person, per institution (or banking group). There may also be higher limits of compensation for joint accounts.
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