Thinking of opening an account?

Thinking about opening a bank account, you might have found that there are lots to choose from. However, despite all of the different names, there are ultimately two main types – current accounts and savings accounts.

Current accounts are generally designed for your everyday banking needs and savings accounts…well, they’re usually a good option for saving up!

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Here’s a quick film about the difference between a current account and a savings account…

Current Account and Savings Account from Zinc Media on Vimeo.

Current Account and Savings Account from Zinc Media on Vimeo.

Current accounts

To help you choose the best current account for you, it’s a good idea to think about what you want from an account and the way you spend.

Choosing An Account

Things like, what do you want it for?

  • To have your wages or benefits paid into?
  • To pay bills?
  • To pay for things with a debit card?
  • To take money out from a cash machine or a branch?
  • Do you want a cheque book?
  • Will you need an overdraft?

There are three main types of current accounts available, each with different features which suit different people:

Basic bank accounts

A payment account with basic features or basic bank account, is a type of current account. It is available from most personal current account providers within the UK and now in any country in the E­U and EEA. A list of UK providers can be found on this link.

A basic bank account may differ from country to country, but in the UK is offered to anyone who is unable to open up a standard current account, or anyone who does not have a UK based current account with another UK provider.

The accounts are available to anyone who is a legal resident of the EU or EEA, including anyone that does not have a fixed address and asylum seekers.

These are simple accounts that have no account fees. This includes no fees for returned or ‘bounced’ items such as DDs and cheques, no monthly fees for having the account. All transactions in pounds or ‘sterling’ are also free including SWIFT transfers in pounds to any other country within the EU/EEA and CHAPS payments within the UK. These accounts also offer a debit card, as well as Direct Debit and standing order facilities. You will not get an overdraft, cheque book or other account benefits (e.g. free travel insurance).

Do the sums

To see if a packaged account is best for you… do the sums! Decide if you need the ‘extras’ in the first place, then compare the annual cost of each if you had to buy it. Finally, compare this against the annual fee for the packaged account.

Non packaged accounts

You can normally open a no-frills current account for free, which will usually provide:

  • a debit card
  • an overdraft facility – subject to approval
  • Direct Debit and standing order facilities

Packaged accounts

These are current accounts with extras, such as exclusive discounts, insurance cover, breakdown cover or interest on your balance.

However there’s sometimes a monthly fee charged to have an account with these extra features.

Here’s a film from the Money Advice Service, which outlines different types of bank accounts to help you choose which one is best for you.

Joint accounts

Two people can set up a bank account together, both current and some savings accounts. Either of you can then pay in or draw money out of the account – usually without needing the approval of the other person. So you may want to think carefully before deciding to have a joint account. Remember, you would both be responsible for any debt run up if there’s an overdraft facility.


Savings accounts

You can have a savings account as well as a current account. With a savings account you put your cash in and gain interest on it until you take it out. The more money you put in and the longer you can leave your money in the account, the more interest you usually receive.

What’s interest?

Saving accounts and some current accounts pay interest. You can compare the rates of interest between accounts to see which pays more. This film explains how interest works.

Watch now

To find the best account for you, first think about what you want a savings account for?

  • Emergencies?
  • Something special?
  • The future?

You can then choose the type of account that best suits your needs. Remember, you may get a higher interest rate if you:

  • Don’t need to access your money for a fixed time period (e.g. 2 years).
  • Agree to pay in a fixed amount every month.
  • Can ‘give notice’ – meaning you are able to let your bank or building society know in advance when you want to take your money out.
  • Have a lump sum to save.
  • Won’t need to make withdrawals on a regular basis.
  • Choose an online-only account.

With most savings accounts, Income Tax is deducted by your bank or building society before it’s paid to you. If you are a non-taxpayer ask the bank for a form which you then fill out and no tax will then be deducted.

Choosing An AccountHere are some of the different types of savings accounts:

Instant access

This type of account is the most flexible, allowing you to put money in and take your money out whenever you want, without losing interest. However, the interest rates are normally lower than a regular savings account.


ISAs (standing for Individual Savings Accounts) allow you to save a certain amount of money each tax year without having to pay income tax or capital gains tax on what it earns. There are cash ISAs and stocks and shares ISAs are also available. You can find out more about ISAs and this year’s allowance on the Government’s website.

Regular savings

This could be the best choice if you’re able to save a regular amount of money, even if it’s only a small amount each month. Check the details, as sometimes a certain number of payments need to be made each year to avoid losing interest or paying a penalty, but you might get extra interest if you can meet the account criteria.

Notice / limited access accounts

You often get a better rate of interest if you’re willing to ‘give notice’ of any withdrawals (for example 30 or 60 days), or to limit the number of withdrawals that you’ll make in a period of time. For example, you might get extra interest if you only take money out once a year.

Whether you’re thinking about a summer holiday, buying a new car, or saving for a rainy day, this short film looks at some of the ways you can get there.

Next steps

Now you have an idea of the types of current and savings accounts available, why not check out bank and building society websites or online comparison sites to find your ideal account?

What to read next

Opening an account

Taking you through the basics of what's required to opening an account, including documents for proving your identity and what the process involves.

Running an account

Once you have an account learn the best ways to use it including money in, money out, payments and other facilities available.