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A current account is a bank account that gives you instant access to your money and that you can use for your day-to-day financial life. It allows you to receive your salary, pay your bills, make purchases, send and receive payments and so on. It will come with an account number, a sort code, a debit card and some kind of Internet banking or mobile app facility to manage it.
While the basic functionalities are always the same, different current accounts from different banks will come with a range of different features to suit different needs.
How to compare current accounts
The best current account for a young professional who’s just moved out from their parents’ house will not be the same as the best current account for a CEO, so you’ll need to figure out which features are important for you. You should consider the following:
Switching bonus and rewards. Banks are vying for customers and have lots of tasty offers to get you to join. The most popular is, unsurprisingly, a big fat lump sum of cash! Look at what switching incentives are available at the moment, or compare current accounts with ongoing rewards here.
Great mobile app and low fees. Banking directly from your phone will make tracking your finances easier and more fun (maybe?). Check out current accounts with great apps.
Overseas spending. If you travel often, you want to be able to do it without paying any fees. High-street banks tend to be quite bad at this, so if low-cost travel is important to you, you may want to consider a challenger bank like Monzo or Starling, or a banking app like Revolut. This article shows the best cards for travelling overseas.
Interest rate. Not many current accounts pay an interest rate these days, but getting one of the few that do can be a nice way of topping up your monthly balance. Plus, sometimes opening a current account with a certain bank also gives you access to promotional rates on its savings accounts – if you need one, it’s a factor worth considering. Compare high-interest current accounts here.
Cheap overdraft. Overdrafts make an expensive way of borrowing money, so you should avoid them if you can. However, if you know you’re going to use yours, choosing an account that prices them fairly becomes pivotal. Compare current accounts with overdrafts here.
Insurance benefits. In return for a monthly fee, some current accounts (the so-called “packaged” accounts) come with a whole lot of insurance benefits. It isn’t always the cheapest deal you can get, but it’s a great way of getting yourself very comprehensive cover levels for 12 months a year. Compare packaged accounts here.
Have you thought about a mobile-only bank?
Digital banks like Monzo or Starling have stolen the headlines in fintech for the last few years. In the Finder office we’re big fans – here’s why:
Cool features. Digital banks are constantly evolving and adding interesting features. The whole experience feels more user-centred and it’s easier to keep an eye on your spending, make budgets and personalise the whole thing too.
Easy to set up. You just download the app, enter your data and confirm your identity. It usually takes less than 10 minutes.
No fees. This usually also applies to spending abroad.
How to switch current account
If you’ve had your current account for years, the idea of switching may sound daunting – many people stick with bad deals just to avoid the hassle. However, the process is in truth quite simple thanks to the Current Account Switch Service (CASS).
Any banks signed up to CASS will switch over your account for you in seven working days. You don’t need to do anything except pick out your new current account and decide on a switch date. Here’s how it works:
Your balance and recurring payments are automatically transferred to your new account. This includes both direct debits and standing orders.
Your old account is closed. Your transaction history will not be transferred to your new account, so it’s a good idea to make sure you’ve got all your bank statements first.
Incoming payments to your old account will be redirected. A message with your new bank details is also automatically sent to the payer.
Depending on what your new bank is offering at the time, switching through CASS may also allow you to access switching bonuses and rewards.
Types of current accounts
Apart from standard current accounts that prioritise one feature or another, there are also dedicated types of current accounts to suit other specific needs:
Joint current accounts. Most current accounts can be opened together with another person (your partner, another member of your family, a friend). Just be aware that this creates a financial association between the two of you, which may potentially impact your credit score. Learn more on joint accounts here.
Bad credit. Most banks perform a credit check when you apply for a current account. If your credit score is less than ideal, you may still be offered an account, but you may not get an overdraft. Learn more on current accounts for people with bad credit.
Student accounts. If you’re a student, you can bag great perks and rewards and a fee-free overdraft with a student current account.
Children accounts. In order to be eligible for an adult current account, you usually need to be 16 or 18. However, children’s current accounts are available to kids as young as 11.
Business accounts. If you run a limited company or are a sole trader, it’s a good idea to keep your business finances separated from your personal finances. You can do this with a business current account.
Potential current account fees and costs
When picking a new current account, you should always make sure you’re aware of all the potential costs. Here are some of the fees you may come across:
Monthly fee. Most current accounts are free, but some will charge a monthly fee, especially if they offer special perks and benefits.
Overdraft charges. Overdrafts tend to be costly. Always check how much your bank charges before using yours.
Foreign transaction fee. Many debit cards charge a fee when you spend in a currency other than sterling. The foreign transaction fee often amounts to around 3% of the transaction. If you want to avoid it, you could consider having a dedicated account for when you’re travelling – digital banks like Monzo and Starling don’t charge foreign transaction fees.
ATM withdrawal fee. Withdrawing cash may come for a fee with some current accounts, especially if you do it overseas.
International money transfer fees. Sending or receiving money in a currency other than sterling is likely to be quite expensive with a standard current account. You may want to consider a money transfer service instead.
Cheque fees. There’s usually a pretty hefty fee for cancelling a cheque.
To be eligible to open a current account, you must be a legal UK resident, and at least 16 years old. Some banks may stipulate that you must be 18 if you don’t have parental approval. You may also need to be credit checked – this is because many current accounts will come with an overdraft that may be reduced if you have a poor credit history.
With most banks, you can usually apply online – you will need to provide your personal and financial details. In some cases, you may then be asked to pop into a branch to have your ID verified. If you’re applying for an account with a digital-only bank, you’ll usually need to apply from the mobile app and to provide a picture of your ID.
You usually can. You’ll have to get in touch with your bank, who will be able to turn your personal current account into a joint account.
There are no fixed rules and you can keep as little as £1 in your current account. However, people usually have their salary paid into their current account and keep most of it there to spend it over the course of the month, together with some emergency funds that are thus easily accessible if anything goes wrong. It’s also a good idea to open a savings account to put your savings aside (so you’re less tempted to spend them). Finally, keep in mind that some current accounts may require you to deposit a minimum sum every month in order to access certain benefits.
It all depends on your circumstances, but in a nutshell, you want: a) no fees, b) agility (your account must be easy to manage and use) and c) some nice rewards and perks if possible. In our opinion, the first two things beat the third one – rewards and bonuses are great, but being able to keep on top of your finances for free and with no headaches is much more important.
Banking scores
★★★★★ — Excellent
★★★★★ — Good
★★★★★ — Average
★★★★★ — Subpar
★★★★★ — Poor
Finder scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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