Compare Current Accounts

Current accounts explained

Current accounts are designed for everyday transactions like paying your bills or general spending – these accounts are also typically where your salary will be paid into. Also known as a bank account, they tend to come with a cash or debit card, allowing you to make purchases or withdraw money.

There are many different types of current accounts available on the market to suit a variety of needs, including those offering an agreed overdraft, high rates of interest, or accounts catering to consumers with a poor credit history.

If you know which account you’re after, you can click through to the dedicated chart above or read on to discover which one is right for you.

Types of current account

Here’s a brief overview on the types of current account available:

Standard accounts

Standard current accounts, which offers you all the 'standard' account features, but nothing extra. These accounts may or may not charge a monthly or annual fee.

High interest current accounts

High interest current accounts offer you a competitive interest rate on funds up to a certain balance and/or monthly cashback for keeping your account in credit. These accounts may come with monthly fees, and will likely require a certain income and number of standing orders or direct debits, but could offer you some extra cash on a monthly basis if you use them well.

Bank accounts for bad credit

Basic or guaranteed accounts can be helpful for those with a bad credit history or those that do not want to have an overdraft. These types of bank accounts often do not require a credit check.

These accounts while accessible, may charge certain fees either as a regular charge and/or for transactions.

Current accounts with overdrafts

Current accounts with overdrafts include a facility to borrow money in the short term from your bank. If you use your overdraft then you will normally be charged interest on the amount used. You should agree an overdraft arrangement with your bank before going overdrawn. It’s important to carefully consider what you’re looking for with this type of bank account, as the best current account for overdrafts may be the one offering higher limits on what you can borrow, or the one offering the lowest interest rates depending on your situation.

Free current accounts

Some current accounts won't charge you a monthly fee although they are likely to still charge fees and/or interest for overdrafts. A free bank account may also offer interest on credit balances and may also have funding requirements. 

Packaged bank accounts

A packaged bank account is a current account that includes additional products and services – such as breakdown cover, mobile phone insurance, travel insurance, home emergency cover – exclusive access to other products from the bank, for example an exclusive rate of interest on a savings account and retailer offers and discounts. These accounts usually charge a monthly fee. Read our guide to packaged bank accounts to learn more. 

Student current accounts

Designed to meeting the financial needs of students, student bank accounts tend to offer the same features as standard bank accounts alongside interest-free overdrafts and student incentives such as discounted rail travel. 

Who is a current account suitable for?

The world of banking has evolved with different types of current accounts designed to suit the needs of different types of people. For example those with a poor credit history can now open an account with a range of banking services, such as accepting direct debits and includes a card to make online and instore payments. Those looking for the best perks and incentives could also consider a current account switching offer.

How to switch current accounts

Whether you’re going after the latest switching deal or just fancy a change, moving current accounts is a relatively straightforward process thanks to the Current Account Switch Service (CASS). Using the CASS, all you have to do is apply for an account, and your new provider will take care of moving across any Direct Debits and standing orders under the Current Account Switch Guarantee. Read our current account switching guide to find out more about moving accounts, and which providers participate in the CASS – you'll find that almost all do nowadays.

How to choose the best current account

If you’ve had a look over the different types of current account, the next step is determining which one is best for you. This will of course depend on your personal circumstances. If you're often overdrawn, you'll likely be attracted to an account with overdraft facilities. If you never go overdrawn, on the other hand, you might want to take advantage of a high interest current account instead.

If you're looking for the best current account that gives you something back, a switching incentive might lure you in with some offering up to £125 to switch. However, a little bit extra every month might work out as more lucrative over the long run, so you may want to consider a cashback or interest-paying current accounts instead. Regardless, remember that a lot of incentives will require you to close your old account, so you can't just open an extra account for a cash offer.

Whatever you are after, make sure to compare current accounts on all their features, not just their benefits, otherwise you might find that a cashback offer is undone by a high account or overdraft fee. 

What to compare when choosing a current account

The cost and value of fees

Some types of bank account charge fees, for example a packaged bank account has a monthly fee to offset the cost of additional products and services bundled with the account. You should consider if you will use the add-ons included in a packaged account and if so if it is good value to pay the monthly fee. 

Those bank accounts designed for those with bad credit may also charge fees, often a monthly fee and some transaction fees. In this case, the account provider is looking to cover its operating costs and generate profit.

There are current accounts that don't charge fees, but they may require you to deposit a specific sum of money each month to qualify.  

The amount of funding required

You may be required to pay in a minimum amount of money per month. Usually, this restriction is applied to high interest current accounts, which offer a decent in-credit interest rate in exchange for your commitment and regular income. Aside from a minimum monthly funding amount, these accounts may require you to hold several direct debits on it, to make sure your account with them is your main banking product.

The credit interest you could earn

If you are likely to have a credit balance then a high interest current account may be better for you. These current accounts usually offer a higher rate of interest than standard current accounts usually up to a set balance. Remember that with a current account, interest rates may not be paid at all, or at a very low rate, so it may be worth placing any money that exceeds this limit into a savings account instead. Also keep in mind that these accounts tend to come with high overdraft rates, so you should only consider an account offering credit interest if you’re confident you won’t find yourself regularly using an overdraft.

The cost of an overdraft

If you are likely to dip into the red on your current account, you should consider one that charges a low rate for arranged overdrafts or offers you an interest-free tier before you get charged. This can prove to be very valuable if your income and outgoings are nearly the same and your account balance goes near or below zero on a regular basis.

How you want to use the account

Current accounts from challenger banks are usually only accessible by an app or the internet. Some bank accounts will also offer access to your account through retail locations such as the Post Office, this is handy if you need to pay cash into your account. 

Most high street current accounts can be operated across a range of channels including phone, branch, online and app. 

Cost for cash

If you need to withdraw cash from cash machines you should also check the cost to do this. You can also find cash machines near to you using the LINK ATM locator.

Should I get a savings account or a current account?

There is a different purpose for a savings account to a current account. A current account has more functions than a savings account, designed to facilitate your day to day needs to pay bills and pay for goods and services. Whereas a savings account is designed to help you build deposits over time and reward your efforts in interest.