Thursday, 2 December 2010

Bank Account - What is it?

Bank accounts are designed to suit your day-to-day needs. This type of account is ideal for handling regular income such as your salary and any benefits you might receive. It also lets you manage your outgoings, e.g. paying bills.

There are various types of bank accounts, so you need to look at your financial needs and habits to make sure you choose the one that's right for you.
The following are the typical accounts:
Basic Accounts
Added Value Accounts
Accounts for Young people
Student Accounts
Graduate AccountJoint Accounts
Accounts to meet your religious needs
What should I look for when choosing a bank account?
It really depends on what you need but there’s a bank account out there for everyone. A good way to work out the one that's right for you is to think about how you’ll use your account and what you need it to do.

When looking for your bank account, compare the following:
Interest rates
Different banks and types of bank accounts offer different interest rates. Find out the rate and how long it will last. An introductory rate may sound good but might not last long.
Overdraft facility
It can be useful to have a safety net in case the unexpected happens. Different accounts will have differently sized overdrafts available. It’s worth remembering, though, that interest rates on an overdraft are usually higher than those for personal loans.  Remember to watch for any fees if you go over your agreed overdraft limit, and check the terms and conditions for interest rates and charges.
We all get caught out from time to time with an unexpected bill or expense or if we don't receive an expected payment on time. If you're worried this might happen, make sure you find out if there are any charges that will apply if you do go overdrawn or over your agreed overdraft limit.

Some accounts even charge for paying on your debit card, cash withdrawals, standing orders and direct debits, so it’s worth finding this out in advance as you could be stuck paying a fee you hadn't expected.
Features and benefits
For a monthly fee, some banks offer a range of added value or packaged accounts that give you access to certain features and benefits. These can include things like mobile phone and travel insurance, car breakdown cover and card protection. Before you choose an account, ask yourself if you’d make the most of any of these benefits. In many cases, the value of the different benefits will far outweigh the cost of the fee.

Student accounts are well known for offering freebies. Just work out if their benefit is worthwhile, or whether you really need them anyway.
Sometimes you might need money quickly, and swapping money from one account to another could prove more complicated than you expected. Check how easy it will be to transfer money and how long it will take, particularly if you are making transfers between accounts held with different banks.
Customer service
Your bank needs to be available when and in a way that suits you. That may mean a 24-hour phone service, a local branch where you can speak to someone in person, online or mobile banking.
For the times when you do need to see someone in person, it’s a good idea to make sure there's a branch near you, whether that’s near home or work.
Cash machines
Although it’s usually free, it’s worth finding out if you will get charged to take out your money from a cash machine. Some machines may charge you, but they will always tell you and give you the option to cancel without charge. You should also check where you can use your card as some banks only let you withdraw cash at certain cash machines.
Your money abroad
Some banks charge you to use cash machines abroad, so you should think about alternative ways of making sure you have access to cash when you're abroad. On a short trip, you might want to take all your money as cash (but always keep it secure). For longer stays, travellers' cheques might be a better option.
New to the UK
If you’re moving to the UK or have just moved, you may find it’s easier to have a UK-based account. There are accounts designed with you in mind, with specific features that you’ll benefit from while you’re here. Some banks may also offer you 0% on currency exchanges.

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