Current Accounts: What You Need To Know
I have been a happy Santander customer for as long as I can remember. I initially setup my Santander current account when I started my first job when I was 14 years old and as you can imagine at the time, I knew nothing about current accounts so my decision was mostly based on what bank was closest to me. I am now 27 years old and I like to think I am a little wiser about money than I was at the tender age of 18 so I think it is about time to revisit the current accounts of today to see which best suits my best interests.
Every major bank offers their own current account package so my job today is to wade through all the information and decide which current account best fits for my current situation. For a bit of background knowledge, I am 32 years old, I have an ok lending history thanks to my car finance and am looking for an account that is not going to charge me the earth every time I go overdrawn or forget to send back certain documentation. I have narrowed down my initial search to three current accounts provided by Barclays Bank, Natwest and my current bank Santander.
Before we delve into the individual bank accounts, it is good to know what you can expect to come as standard on many current accounts you find on the market. For me, any accounts that do not have a fully featured online banking system is not even going to be considered. I am a child of the web and I do not like doing my banking over the phone or queuing up to see someone at my local branch. An overdraft limit is not as important as it used to be for me but I understand that many people still NEED their overdraft so I will be paying particular interest to this need within my individual reviews. Other aspects to take note of are the interest rate the banks pay you for the money you have in your account. Current accounts are primarily used for your day to day money needs so they are not designed to be heavy interest payers but is still something to be mindful of.
The Barclays Bank current account is an exceptionally straight forward and easy to understand current account that pretty much anyone can use. The main benefit of going with Barclays Bank is you get one of those swanky wireless debit cards or cash card which makes paying for things under £10 as easy as using your Osyter card on the tube. Ok this is more of a novelty and time saving incentive but cool none the less and I don't think any other bank offers this kind of card. Although an overdraft limit is not offered as standard, you can apply for one at any time. Your Barclays Bank account can be accessed at over 1,700 branches nationwide as well as telephone and online banking services. The maximum you can take out per day is £300 which is pretty standard but you can also withdraw cash from cheques that have yet to be cleared. Most importantly there are no monthly charges or things you need to do to keep this account which is great for people who do not have a fixed monthly income. The main downside to the Barclays current account is the lack of interest payments on any savings you keep within your account.
Quite a few of my friends were with Natwest so I wonder what the appeal is all about. From what I can tell there really isn't anything special offered by Natwest aside from their Emergency Cash services which allows you to take out up to £300 from a cash machine in the event you lose your debit card. I have lost my debit card a number of times over the years so this service is actually very useful for someone as forgetful as I. In terms of an overdraft limit, they provide you with a £100 interest free limit just encase you go slightly over your current balance. I can't tell you how much I paid in overdraft fees over the years for just going £5 over my balance so this in my eyes is a fantastic feature. Like Barclays bank, your interest rates are 0% which means you will never earn anything from the balance you hold.
Who knows, I might have had it right all along with a Santander Account so let's see what I am currently getting. The first noticeable thing about the Santander current account is their interest rates. They pay 5% interest for up to £2,000 which equates to around £100 per year as long as you always have above £2,000 within the account. In terms of overdraft, Santander will match any overdraft limit offered by another bank up to £5,000. From April 2020 there is 39.9% APR appliyable to your overdraft as there are changes in bank charges. All in all the Santander current account is far superior to the other two accounts on review and they do not have a minimum monthly funding and fee.
After all my research it looks like I already have the best deal for my needs with Santander account. If however I was in a position where I couldn't deposit at least £1,000 per month I would certainly be courting Natwest for their current account thanks to their small yet useful overdraft limit and the ability to take money out through cash machines without your debit card. Barclays Bank have a nifty wireless debit card but it doesn't make up for the lack of extra services such as interest on savings and standard overdraft limits.