Banking - Types of Bank Accounts

Current Accounts

Current accounts are the most common type of bank account, and allow you to deposit and withdraw cash.  Cash can be deposited in a number of ways:

• Depositing coins and/or notes at a branch
• Depositing a cheque at a branch
• Wiring money from abroad
• Electronic transfers from other accounts

Cash can be withdrawn in a number of ways also:

• Withdrawn from an ATM, using a bank card
• Purchasing goods using a bank card
• Writing a cheque
• Setting up a standing order (SO) or direct debit (DD) to pay regular amounts to an individual or organisation

Current accounts are generally used for day-to-day management of cash.  Wages and salaries are often paid directly into your current account by your employer, to be withdrawn at your convenience using the methods above.

Joints accounts can be set up, whereby 2 or more people are eligible to withdraw the money from the account.  In this case each person is usually provided with their own cheque book and bank card.

Specialised Current Accounts

There is a wide range of current accounts available which are designed to suit the needs of individuals, some of these include:

• Accounts with Extras
• Accounts for High Earners
• Childrens’ and Young Peoples’ Accounts
• Student Accounts
• Graduate Accounts
• Foreign Currency Accounts
• Euro Accounts

Eligibility for Current Accounts

Almost anyone can open a current account.  However, individuals with poor credit history, CCJs or a history of fraudulent activities may find it more difficult to open a current account, and may find there are less options available to them.

Where to get a Current Account

Current accounts are available from high street banks, most building societies and internet banks.

All-in-One Accounts

All-in-One accounts bring together your mortgage, savings, credit cards and your current account.

The main advantage of All-in-One accounts is that income and savings paid into your account is offset against your mortgage, resulting in a lower mortgage balance and lower interest costs.

As with current accounts, the cash balance in your All-in-One account is available to be withdrawn in the normal way, i.e. write cheques, use of bank card.

Mortgage payments are often more flexible when combined as part of an All-in-One account, allowing customers to make underpayment and overpayments without penalty.

Savings Accounts

There are numerous types of savings account available, including:

• Standard Savings Accounts
• Standard Plus Savings Accounts
• E-Savings Accounts
• ISAs
• Guaranteed Equity or Fixed Rate Bonds
• 5 Year Childrens’ Bonds
• Smaller Bonds
• Childrens’ and Young Persons Savings Accounts
• Child Trust Fund
• Term Deposit Accounts
• Guaranteed Tracker Accounts

The difference between savings accounts and investments, is that savings accounts generate a steady and certain return, while investments can go up or down, and therefore the return is much less certain.