Choosing Your Personal Bank Account

Choosing the right account means assessing your whole situation – whether you are a student on a tight budget or a successful businessperson with surplus cash to invest. Not only do you need to think carefully about the type of account you want – current, saver, overdraft or not – but you may want to consider how you want to carry out your day to day banking. Some points to consider:

How do you want to bank?

Do you need to visit your local branch every time you want to carry out a transaction, or are you happier banking on the phone? These days, many people like to manage their accounts on the internet, but perhaps you prefer face-to-face contact with your bank. In that case, one of the larger high street banks may suit you better, with more branches and easier access. Some transactions can be carried out at Post Offices, depending on your bank and account. If you have a salary paid into your account monthly, and use cards for most purchases, you may prefer to bank over the phone or online. Most high street banks will have facilities for online banking, but some specifically online banks can offer better terms, including higher interest on your money.

Interest and overdrafts – in the black or the red?

If you have a surplus left after your monthly expenditure, you should be earning interest on it. Even a small amount – as little as one percent – can make a difference. Some current accounts pay a negligible amount of interest, and you may want to consider opening a separate savings account with high interest or tax benefits.

Student accounts can offer large overdrafts and reduced charges - but bear in mind this facility may be withdrawn once your studies are over.

Some ‘privilege’ accounts come with inducements like interest free overdrafts, or special offers, but check for monthly charges and less-than-spectacular interest rates.

Your family situation

Remember that joint accounts, while convenient, mean that both partners are liable for any debts or overdrafts. It’s a wise idea to keep at least a portion of your savings and finance separate in case the worst happens. If you have dependents, you may want to set up separate accounts for them or take out some form of insurance to ensure they will be provided for if circumstances change.

There are tax benefits and allowances available for married couples or those with children.

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