Bank accounts explained

Bank accounts are finanicial bodies where you can deposit or withdraw money. They are usually opened with a banking organisation and they keep track of the activity of the account.  You will normally receive a monthly statement from your bank displaying your transactions for the previous month.

There are many types of bank accounts available to suite your needs, bank accounts for everyday use, for students and some designed to save you money which are outlined below.

Current Accounts

Current accounts are designed for your everyday use.  They are usually used to deposit your wage from your work and to pay bills via direct debit or cheque.  With a current account you will get a cheque book and cash card making it easy for you use your money. 

You can have an authorised overdraft limit on the account allowing you to borrow more money that you actually have in your account.  Sometimes there is charge for this but some banks will give you a £500 overdraft limit for free. 

All current accounts have a BACS service which allows you to send money to friends and family or pay off bills via the internet.  You can also earn interest on current account but the rate of interest is not as competitive as a savings account.

Current Accounts Plus

Most banks offer a current account plus.  These accounts are the same as normal current accounts but they give a little more.  They offer incentives like free worldwide travel insurance, mobile phone insurance and many offer free car breakdown service.  All the extras are added on to your account normally for a flat monthly fee.  This fee varies from bank to bank and so do the incentives so it is wise to research into who is offering what and what will benefit your personal circumstances.

Student & Young Person Accounts

Being a student can be a difficult time especially when it comes to money.  Student life can be very expensive with tuition fees, course materials and of course the cost of going out. There are accounts designed for students and young people which have benefits to help them.  Most offer an interest free overdraft limit and give gifts when you open to account to help you as much as possible.  The gifts can vary from DVD’s, gift vouchers, books and travel cards.  The gifts and overdraft limit varies from bank to bank so do read all the details before you open an account. 

When you have finished your studying most banks offer graduate accounts which will keep most of your benefits from your student account helping you in the first few years of your working life.

Savings accounts

Saving accounts are bank accounts which are designed to make the most of your savings.  You can put money into these accounts and earn more interest than the average current account and these accounts can be linked to your current account.

For further information visit our savings accounts section.

Banking Guide
Bank accounts explained Internet banking Which bank account is right for you? Hints and tips	"Bank accounts are finanicial bodies where you can deposit or withdraw money"