Current accounts

With a current account, you can:

• receive payments, like wages, benefits and pension
  
• pay for things or take out cash with a debit card
  
• transfer money to pay bills or other people, including regular payments like Direct Debits and standing orders
  
• manage your account 24/7 through mobile and online banking.

Many accounts will also let you:

• access your account over the phone, in branches and at the Post Office
• borrow money with an overdraft – you’ll normally pay daily interest up to 40%.

See Overdrafts explained for more information.

Most current accounts are free to use, but you could be charged if you:

• don’t have enough money to cover a payment – you’d normally pay overdraft interest or unpaid transaction fees
  
• use your debit card overseas or in a foreign currency – there’s often an exchange fee and sometimes a spending and cash machine charge 
  
• transfer large sums of money – like the deposit for a house
  
• ask for copies of statements.

Some accounts will also charge a monthly fee for certain perks like insurance. 

Unless you’re opening a children’s current account, you’ll normally need to be aged 18 or over and a UK resident. Banks will also ask for one or two forms of ID so they can check your name and address.

See how to open a bank account for full step-by-step help. 

The type of account available to you will largely depend on your situation.

This usually offers:

• a debit card
• mobile and online banking
• a chargeable overdraft
• the option to set up regular payments.

There’s often no monthly fee for these features.

Offers all of the features of a standard account, plus features that might include:

• an interest-free overdraft
• cashback on spending or bills
• interest
• free overseas spending.

You might need to pay in a minimum amount or pay a monthly fee to get this type of account.

Comes with added insurance policies that could include coverage for:

• travel
• mobile phone
• gadget
• vehicle breakdown.

Always check you’re able to claim and if it’s cheaper elsewhere. You might also get perks like better interest or loan rates.

A good option if you’re studying or have recently completed a university course or higher level apprenticeship. This type of account usually offers an interest-free overdraft.

A standard current account for under 18s with no overdraft. You might need a parent or guardian’s permission to open one, or to get certain features like a debit card.

Offers most current account features except an overdraft. People with a poor credit history, convictions or who are in prison are usually accepted for this type of account.

Learn more about Fee-free basic bank accounts.

Run by not-for-profit organisations, these accounts have similar features to a standard bank account.

However, you’ll usually need to meet the credit union’s membership criteria, which could mean living in a certain area. You might also have to provide documents to the union when applying, and pay a monthly fee.

Learn more about Credit union accounts.

Lets you spend and withdraw cash, but you can’t usually set up regular payments.

These can be quick to set up and usually don’t involve many checks, but they can often have high fees for features like withdrawing cash.

Learn more about Prepaid cards.

Provided you meet the eligibility criteria, there’s no limit to the number of accounts you can open. For example, you could choose to have one current account for your spending and one to pay bills from. 

But each application will normally place a mark on your credit file. Too many in a short space of time can negatively impact your credit score. See how to improve your credit report.

Most current accounts can be opened with two or more people, which can be handy if you share money or household bills.

But only do it if you trust the other person. They’ll be able to access any money in the account and see all transactions. Your credit files will also be linked, which can impact your credit score if the other person has a poor credit history.

See joint accounts explained for more information.

Most current accounts are protected by the Financial Services Compensation Scheme (FSCS). In the unlikely event your bank, building society or credit union were to fail, you’d automatically get your money back:

• up to £85,000 for each banking group, building society or credit union you have accounts with, and
• £170,000 for any joint accounts. 

This means that if your total savings are over the limit, it’s worth spreading the balance over separate banks to ensure you have FSCS protection. But make sure the banks belong to different banking groups, as some (such as Lloyds and Halifax) are in the same group.

Use the free FSCS protection checkerOpens in a new window to see if your money is protected or at risk.

If it’s not, it’s likely to be a virtual current account covered by e-money rules. This means your money is kept safe at a different bank, but you’d need to make a claim to the administrator if your provider failed.

You can learn more in our guide How safe are my savings if my bank or building society goes bust?

You might get extra protection if you have a temporarily high balance – for example, if you’ve recently sold your home. The FSCS can compensate you for up to £1million if the account was credited in the last six months.

There’s more information about temporary high balancesOpens in a new window on the FSCS website.

Tax generally only applies if your current account pays interest. While you won’t pay tax on the cash in the account, you might on the savings interest you receive.

Most people can earn:

• up to £1,000 in savings interest before paying tax, or
• up to £500 if you earn £50,271 to £125,140.

For a full breakdown, including extra allowances for those earning less than £17,570, see how tax on savings works.  

If your account pays other cash rewards, ask your bank if this is taxable or not – most cashback isn’t, but some monthly cash payments might be. 

Our compare bank accounts tool helps you view account features, fees and charges. 

For current account reviews, see: 

• Which? bank account guidesOpens in a new window and top banks for customer serviceOpens in a new window

• MoneySavingExpert’s best bank accounts reviewOpens in a new window

• Consumer Council’s Current Account Comparison TableOpens in a new window  if you live in Northern Ireland.  

See How to choose a bank account for more help.

You can change banks at any time. Switching is usually very quick and easy, with all your payments automatically moved over for you.

There’s more information in our guide How to open, switch and close a bank account.

If you have a problem with your bank or current account, follow these steps.

1. Ask your bank’s customer services to put things right.
2. If you can’t agree on a resolution, make a formal complaint – they have 15 days to investigate and give a final response if the complaint is related to payments. If it’s about anything else, they have eight weeks. If the bank accepts that they’ve done something wrong, they’ll set out what they’re going to do to make things right.
3. If you’re still not happy, or don’t hear back in time, you have six months to take your complaint to the free Financial Ombudsman ServiceOpens in a new window You’ll get an independent decision on whether your bank’s response was fair or if they need to do more.

For more information, see our full how to complain guide.