[Advertisement feature] This is a paid collaboration with HSBC
There are lots of things to take into consideration when choosing a bank account, is it going to be your main current account? Do you want to pay for any extra features? What are your current life circumstances? So I thought it’d be handy to break all of that down today in this post so that you understand the 4 main types of current accounts.
Choosing a Bank Account
Most of us will open our first bank account when we are in our early teens, it’s a great place to stash pocket money or birthday money and will do most of us fine until we hit our adult years. You can usually apply for a current account at the age of 16 (but some banks have a minimum age of over 18 so it’s worth checking and Eligibility criteria and T&Cs apply). When it comes to choosing a new current account there are generally 4 options – a standard current account, a basic current account, a packaged current account and a student current account.
Standard Current Account
A standard current account is your typical account that most banks would offer – it comes with a debit card, will usually have the option for an overdraft or cheque book and won’t normally have account fees. My favourite type of account to have is just a Standard Current Account, I use one for my personal spending and also our joint account – money can move in and out freely and because we work to a budget we don’t have to worry about overdrafts or becoming overdrawn so we opt not to have overdraft functions.
Basic Current Account
A basic bank account will sometimes be offered if you’ve had some financial difficulties in the past or possibly have a bad credit score, it can do the same as a standard bank account but won’t come with an overdraft or chequebook and might limit your daily cash machine withdrawals (although most accounts do that anyway to some extent)
Packaged Current Account
A packaged current account is on that charges a fee each month to give you access to other offers such as mobile phone insurance, travel insurance, breakdown cover or discounts in certain shops. These can be a really good deal depending on your needs, if you have a top of the range phone and you’re a bit accident prone then it can be cheaper to get a monthly fee-based bank account that comes with mobile insurance rather than paying for it separately. It’s worth running the maths on some packaged bank accounts as they’re only worth it if you’ll actually use the added extras.
Student Current Account
Student current accounts, as the name suggests, are only available to students. They are designed to help students manage their finances better and can come with some great perks such as free railcards, vouchers and discounts in certain shops – these bonuses/discounts like the railcard can really add up especially if you commute to get to uni/travel during school breaks. Once you graduate from university the account will automatically transfer to a graduate or different kind of current account.