Choosing a current account can be a difficult thing to do. It may seem simple but many aspects need to be considered including how the current account can work for you on an everyday basis and any special requirements. This article looks at the top tips to follow when deciding on what current account to use.
- It is not always the best idea to stick with the bank you have always been with. The market is becoming more competitive and there are many options for you, so shopping around allows you to find the best options for you out there. Banks rarely reward loyalty so staying with a bank for long periods of time can account for nothing. Instead you are rewarded for joining a bank and opening an account with a new company you have not used before. This is usually a cash bonus of up to £100. Current accounts need to suit your banking and your requirements.
- Switching accounts from one provider to the next is relatively easy, in fact it is encouraged by banks looking for new customers. Any direct debits, standing orders or details will be transferred from your old bank to the new and you will not have to do anything.
- When choosing a current account it is best to understand your banking style. Take some time to look over recent statements and overdrafts and consider all of these factors before taking out a new current account. Some current accounts will reward you for being in credit for instance, so if you are mostly in credit all month and rarely slip into your overdraft then this is the account for you.
- You must also consider the chance of earning interest on your current account. If you are without an overdraft then it is possible to make your money earn money by getting the best current account with a high interest rate.
- However, if like millions of people in recession hit times, you are in your overdraft then it is best to shop around for a current account with good overdraft rate. This should be interest free for a short period or if you are lucky even longer, and after have the lowest interest rate as possible so you can move out of the overdraft as soon as possible.
- It is also possible to find an account with a mixture of the two – rewards you when you are in credit, yet is low when you unexpectedly dip into your overdraft.
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Ben Austin is the CEO at Cost.co.uk, one of the UK’s leading comparison sites for sectors such as finance, travel and insurance.