A current account – known simply as a bank account – lets you make and receive payments, like paying bills, spending online and being paid your wages. Here’s all you need to know.
What’s in this guide
Current account features
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.
How much does a current account cost?
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.
Who can get a current account?
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.
Types of current account
The type of account available to you will largely depend on your situation.
If you have a good credit history
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Standard current account |
Usually offers a debit card, mobile and online banking, a chargeable overdraft and lets you set up payments – normally all for no monthly fee. |
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Accounts with free perks |
Offers the above plus features like an interest-free overdraft, cashback on spending or bills, interest and free overseas spending. You might need to pay in a minimum amount or pay a monthly fee. |
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Packaged current accounts |
For a monthly fee, you get insurance policies such as travel, mobile phone, car breakdown and gadget. Always check you’re able to claim and if it’s cheaper getting it elsewhere. |
If you’re at school or studying
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These normally offer an interest-free overdraft if you’re studying or have recently completed a university course or higher level apprenticeship. |
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A standard current account for under 18s, so no overdraft. You might need a parent or guardian’s permission to open one or to get certain features like a debit card. |
If you’re struggling to get an account
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This offers most current account features (except an overdraft) and usually accepts those with a poor credit history, convictions or in prison. |
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Run by not-for-profit organisations, but you might pay a monthly fee to get one. |
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Lets you spend and withdraw cash but you can’t usually set up payments. |
How many current accounts can I have?
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.
Joint accounts
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.
Up to £85,000, per banking group is normally protected
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 per person.
You can use the FSCS protection checkerOpens in a new window to see if your bank is covered.
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.
Tax on current accounts
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 £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.
Help with the cost of living
Worrying about money because of rising rents, high energy bills or debt? If so, we’re here to help.
Take the first steps to find your way forward with our guides to help you with the cost of living.
Compare current accounts
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.
If things go wrong
If you have a problem with your bank or current account, follow these steps.
- Ask your bank’s customer services to put things right – if you can’t agree on a resolution, then
- Make a formal complaint – they have eight weeks to investigate and give a final response. If you still don’t agree, or the timeframe has passed, you can
- Take your complaint to the free Financial Ombudsman Service – 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.
