Steps to choosing a bank account in the UK
This quick guide is suitable for you if you are trying to find out which bank account best suits your needs in the UK. There are a number of decisions to make when opening a new bank account or switching your money to a different bank account. Hereâs what you need to consider when deciding where to put your money.
Step 1: Choose your account type
When you decide to open a UK bank account you first need to be clear about how you are going to use it. Your financial circumstances also affect the process of opening a bank account and which accounts you are eligible for. Take a look at the following to see which account is best for you:
Current account. Most people choose a current account as their day-to-day account for handling their finances. With a current account you can pay your bills, receive money into your account through your wages or your benefit payments, and save money (although you are unlikely to receive a high rate of interest on your savings).
Packaged accounts. A packaged account offers current account benefits along with additional features such as preferential interest rates, overdraft facilities, car breakdown cover, insurance for travel or mobile phones, or extra services. You will typically pay a fee every month to use these extra facilities and take advantage of the offers.
Basic bank accounts. Choose a basic bank account if you have a poor credit score. You may also pick this account when you donât need or want an overdraft, and donât need borrowing facilities or extras.
Step 2: Decide how you want to bank
Your decision includes how you want to be able to contact your bank and also how you want to conduct your banking transactions. Do you want to do everything online? Not all banks provide internet banking facilities. You may want to conduct your banking over the phone. Or you want to go into a branch to see someone face to face. In this case you need to choose a bank with a branch close and convenient for you.
Step 3: Compare features and interest rates
Fees and rates vary a lot between different banks. You need to work out if you need facilities where fees are charged, for example, an overdraft, then decide which bank gives you the best rate. Look at the accounts that charge the best rate of interest on the money you have in your account. However, if you donât tend to have a lot of money sitting in your account it is best to focus on the fees and penalty charges rather than the interest rate.
Check the incentives offered by the bank in order to attract new customers, including cash incentives, higher interest rates, and special credits.Click here to find out more about getting in touch with different banks to find out about the features and benefits associated with moving your money to their facilities.