Current accounts are the most common form of UK bank account and are used by most people for day-to-day banking. They are popular because they are typically 'free', they keep customers deposits safe and enable basic financial transactions - online banking, debit card payments, and automated direct debits/standing order payments.
Despite being critical to our finances, historically UK customers rarely switched their current account. Switching was fraught with difficulty; direct-debits would go awry, standing orders would go unprocessed, and payment cards would stop working at crucial moments. All-in-all, switching was more trouble than it was worth. The seven-day 'Switch Guarantee' has changed that. Switchers can now swap their current account with confidence, in a similar manner that they might change mobile phone contract.
Banks have responded with innovative reward, premium, and even basic current account deals. Many have even created specific 'switching offers' to tempt customers to change, so compare the best UK online current accounts below, and find your perfect account.
£0 set-up fee
£0 per month
£1,000 per month
0% per month*
Earn 5% AER (4.89% gross p.a.) for balances up to £2,500 (fixed for the first 12 months) if you pay in at least £1,000 per month
Dedicated switching service to personally manage your account opening
Representative Example: 0% EAR (variable) Arranged Overdraft. No Daily Arranged Overdraft Fee for the first 4 months. Then £1 per day capped at 20 days each monthly statement period applies thereafter. Assumed Arranged Overdraft credit limit: £1,200.
£0 set-up fee
£0 per month
£0 per month
19.89% EAR (variable)
RBS Select Account
24-hour telephone, online & mobile banking
Specialist switching team to transfer your account
Emergency cash withdrawal if you lose your card (Min. £25 in credit balance required)
Representative Example: If you use an overdraft limit of £100 a 19.89% EAR (variable) charge will apply
£0 set-up fee
£0 per month
£125 per month
0% EAR (variable)
A stepped fee-free, interest-free overdraft of up to £3,000*
1% AER/gross p.a (variable) interest on credit balances up to £1,000 paid monthly*
Mobile banking and text alerts to ensure you stay on top of your finances
ApplePay enabled payments
*In order to receive the 1% AER on credit balances, £1,000 must be paid in monthly. In order to remain eligible for the account and overdraft, customers will need to pay in at least £1,500 per year of study across two or more transaction and maintain a good credit record
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What are Current Accounts?
Current accounts are the most common type of bank account in the UK and are essential to most people’s personal finance arrangements. Although they are all different in terms of charges and features they all offer some basic advantages and functionality.
Perhaps historically a current accounts primary benefit was that it enabled a holder to store their money in a safe environment, away from the danger of theft or damage. Today they still offer that same protection (if not more since the introduction of the FSCS) but they also give us the tools and functionality (like debit cards, direct debit, standing orders etc) that form infrastructure which enables us to seamlessly transact and automate our personal finances.
What do features do Current Accounts offer?
Most current accounts offer a breadth of tools and services like a chequebook, a debit card, direct debits, standing orders, BACS payments (Bankers Automated Clearing Service - for payments in and out of your account) and overdraft facilities (subject to your status/credit score). Some current accounts also pay high levels of interest on balances, albeit for typically capped to at a certain balance.
There are also packaged current accounts that offer extras, such as travel insurance, mobile insurance and car breakdown cover, for a monthly fee. All packaged accounts offer different benefits and functionality, but some can save people a considerable amount if all the benefits are elements they would normally purchase anyway (e.g. mobile phone insurance, travel insurance etc). Please visit our packaged current account comparison table to identify the best offers available for you.
Who can get a current account?
The minimum age required to open a current account is 16 years old, although most banks have raised that to 18 years old; you might be able to open a current account if you are below the age of 18 with the help of your parents (or guardian).
Some current accounts require a minimum amount must be paid into the account on a monthly basis (salary, benefits, pension etc). What you then do with the money is up to you, but it must go into the bank to start with.
Often current account providers will require that an individual is “creditworthy” before they are offered an account. Individuals who have a poor credit score should look to basic bank account options for their banking needs – although they are unlike to get an overdraft with these products.
How do I apply for a current account?
The process of applying for a current account is very similar to that of applying for many financial products. Usually, the application consists of a form that you need to fill in along with some paperwork for proof of identification and address.
Most accounts offer you the option to open it either alone or with somebody else (a joint account) - keep in mind that if you open a joint account you will be linked financially with that person and you are going to be co-scored.
What does it cost to have a current account?
Most current accounts won't charge you for account services, as long as there is money in the account, however, if you have opted for a packaged current account then you have to pay the monthly fee.
It is important to note that although no other charges and fees are associated with maintaining a current account, there are some types of transactions that will incur additional fees; for example your bank might charge you if a direct debit was returned due to insufficient funds, or an overdraft fee might be charged if you spent more than you had. In order to find out all the charges and fees you might incur please see the terms and conditions of your bank.
Can you switch your current account while in your overdraft?
The short answer is yes. It is generally assumed that if your current account is in the red that you are tied to your bank and unable to switch. There is a common misconception that being in your overdraft leaves you stuck with your current bank or building society (at least until you are back in the black) and it is assumed that another bank would be unwilling to take on a customer who already has an outstanding debt on their current account. However, it is certainly possible.
Because you are in your overdraft you won’t necessarily have numerous choices as to whom you can switch to, but if you have a reasonable credit history and a good history of overdraft repayment and management (i.e. having stayed within your limits) you will have options.
How is the overdraft balance cleared?
You will need to settle any outstanding balance (debt) with the organisation you hold your old account with before the account can be closed. This is handled by your new bank as part of the switching process. Supposing you have been deemed eligible to switch under your new bank's criteria and they have agreed to shift your overdraft debt to your new bank account, then your new bank will make the payment to the old account (similar to balance transfer) to assume responsibility for your debt.
This will happen on the last day of the switching process and effectively confirms the switch. Once the transaction has taken place, your old account is closed and your overdraft is active on your new account, meaning this account is officially open.
Be sure to read all print associated with your account. Ensure you are aware of any charges and fees that a switch may incur as well as comparing interest rates to get the best deal. You should, however, acknowledge that overdrafts are supposed to be used for short-term borrowing and tend to have interest rates which reflect this.
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.
Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.
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