| Account type |
Choose it if |
Things to know |
Current Account
A day-to-day account with a bank or building society
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You need full banking facilities including:
✔️ Setting up Direct Debits, standing orders & access to the Faster Payments Service
✔️ An optional overdraft
✔️ A debit card to use for online purchases, in stores and at ATMs in the UK
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❗ Sometime these accounts are free, sometimes there’s a monthly fee
❗ Additional charges may apply for things like withdrawing cash abroad or going over the overdraft
❗ Usually will require a hard credit check to open the account |
Basic account
(also known as a cash account)
A current account with limited features
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You just need an account for your income and making payments
With a basic account you can usually:
✔️ Set up Direct Debits & standing orders
✔️ Get set up with online banking
✔️ Use your debit card at UK ATMs
✔️ open one without a credit check
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You won't be offered:
❌ Cashback
❌ Overdrafts
❌ Cheque books
❌The chance to earn interest |
Student Account
A current account for people in higher education
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You need an account during your studies that also offers:
✔️ A 0% overdraft for anyone aged 18+
✔️ Perks like railcard discounts |
❗ Overdrafts are debt. Be careful of overspending during your studies, or you may leave education with additional debt to pay off when the 0% interest period ends
❗ You’ll need to provide proof of your education status
❗ Usually will require a hard credit check to open the account and/or apply for the overdraft |
Packaged Account
A current account with added benefits |
You think you’ll use the packaged products, which could include things like:
✔️ Travel insurance
✔️ Mobile phone insurance
✔️Vehicle breakdown cover
✔️ Higher interest rates
✔️ Discounts
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❗ Usually has a monthly fee |
Joint account
An account shared by two or three people |
✔️ You want to allow multiple people to access an account’s money and facilities
✔️ You want to manage shared finances with your partner, housemates or family members
✔️ Current accounts
✔️Savings accounts
✔️Packaged accounts
✔️Credit cards |
❗ When you open a joint account, you agree for your credit reports to be linked
❗ Other people’s financial behaviours could impact your personal credit score
❗ Accounts can often be opened online or in branch
❗ All named parties will need to be present to close the account
❗ Everyone named will be equally responsible for the account, i.e. paying fees
❗ All parties have the right to withdraw all the money at any time
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Children’s account
An account to help your child get used to responsibly managing their money |
✔️You want your child to learn good money habits
✔️They are below the age of 18
✔️ You want an account that helps to stop them overspending |
❗ If the child is under 16, a parent or guardian will typically need to open the account on behalf of their child
❗ These accounts usually have restrictions to help control the account
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Instant access savings account
An account that helps you save, but still withdraw money any time |
✔️ You want to keep savings separate from your day-to-day accounts
✔️ You want instant access to your money |
❗ Without full transactional services, you’ll normally need a current account too |
Fixed term savings account
An account where you commit your savings for a set period |
✔️ Want higher interest rates on your savings
✔️ Are happy to lock your money away for a large chunk of time |
❗ There are usually penalties for removing your money early, such as paying a fee |
Cash ISA (individual savings account)
A savings account where you won’t pay tax on interest you earn |
You want:
✔️ Tax-free savings
✔️ A good rate of interest |
❗ You’d lock your money away for at least a year
❗ The amount you can save each year is limited (£20,000 in total)
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Investment ISA
An ISA where your money is invested for a potentially bigger return – but you also risk getting back less that you put in
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✔️ Want a way to start investing with little effort |
❗ Make sure you understand (and are happy with) the risk involved |
Lifetime ISA (Lifetime Individual Savings Account)
A savings account for long-term goals of buying your first home or for retirement |
You:
✔️ Are saving a deposit for your first home valued at £450,000 or less (the UK Government is currently topping Lifetime ISA deposit savings up by 25%! That’s an extra £1,000 for every £4,000 you save in a tax year)
✔️ Are saving a personal pension for your retirement
✔️ Want your savings locked away until you’re ready to either buy your first property, or to retire (60 onwards)
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❗ You need to be aged 18-39 to open a Lifetime ISA
❗ If you withdraw early/don’t use the money for the house deposit/retirement, you will lose the 25% Government top up
❗ People diagnosed with terminal illness can withdraw without losing the 25%
❗ You’re only eligible to use it to purchase property if you have never owned property before
❌ You can’t pay in after 50 years old |
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