Current Bank Account

A current account allows you to receive money and pay bills. It can also help you to save money for special occasions or emergencies.

With a current account you can:

• have your wages, benefits, State Pension or tax credits paid directly into your account
• pay in sterling cheques for free (you will have to wait four business days before the money is available for you to spend)
• check your balance and withdraw cash from cash machines in the UK. This is usually free, but some bank cash machines make a charge. Some convenience cash machines such as those inside small shops, on garage forecourts and in nightclubs may also charge you each time you withdraw money from them
• set up Direct Debits and standing orders to pay your bills

Some current accounts may offer:

• an overdraft – see Borrowing money
• interest on your money – see Opening an account
• other services, for example sending money abroad or cashing foreign cheques (there will often be a charge for these services)
• telephone or internet banking facilities
• extra features such as insurance (for example travel, life, mobile phone), special offers or extra services (accounts with these features usually have a monthly fee) – see Packaged current accounts
• cash withdrawals and balance cheques at Post Office branches

Some banks let you have a debit card to pay for your shopping and some let you pay your bills by standing order. Most let you take money out, pay money in or check your balance at bank counters.

How Much Does a Bank Account Cost?

If you have money in your account (called 'being in credit'), you do not usually have to pay a fee for the standard services provided for your account by a bank or building society. These may be:

• paying for goods and services with your debit card in the UK
• most cash withdrawals in the UK
• standing orders
• Direct Debits

Some accounts have additional features, for example various types of insurance, and for these you will be charged a monthly or yearly fee – see Packaged current accounts.

An Overdraft

This is a way of borrowing money from your bank or building society, linked to your current account. Some banks or building societies offer an interest-free period but this is unusual, and interest rates are usually higher than for personal loans.

Charges can also be high if you go over your overdraft limit, or spend more money than you have in your account without arranging an overdraft – see Bank overdraft.

Cash Machines (ATMs)

In the UK, taking money out of a cash machine with your debit card is usually free. However, some convenience cash machines such as those inside small shops, on garage forecourts and in nightclubs may charge you each time you withdraw money from them.

You will also be charged if you use a credit card, store card or charge card to withdraw money and your card issuer charges a cash-advance fee.

The cash machine will tell you up front if you'll be charged, so you can decide whether to cancel or carry on.

You may also be charged by your bank or building society, or by the cash machine operator, when using cash machines abroad. They should always tell you before you withdraw the money how much the charge will be.

Packaged Current Accounts

A packaged current account is a current account that provides a range of additional benefits, usually different types of insurance, in return for a monthly fee. Many banks now offer a range of different account options with different monthly fees depending on the level of benefits and incentives offered.

The benefits commonly include:

• commission-free foreign currency and travellers' cheques
• travel insurance
• motor breakdown cover
• mobile-phone insurance
• ID fraud insurance

Some banks require you to activate the services. You should check whether you need to do this at the start, otherwise you may find that the insurance is invalid and you've been paying for something you can't use.