Opening a Bank Account

by MarketProSecure UK

Once you have decided to open a bank account it only remains to choose the type of account you need, and the bank that is going to provide the services.

The Basic Bank Account.

The basic bank account is a safe and convenient place in which to keep your money. You can have your salary, pension, benefits or tax credits paid into it, and you can set up direct debits for the automatic payment of bills. You can also get an ATM card, which will allow you to draw cash from machines or a debit card, which can be used to pay for goods and services. This type of account does not provide a cheque book and you cannot have overdraft facilities.

The Current Account.

With the current account you get a cheque book and a cheque guarantee card which assures the person accepting the cheque in payment for goods or services that the cheque will be honoured by the bank. You also get a debit and ATM card. These cards, and sometimes both functions are performed by a single card, allow you make payments and to draw cash from a machine, even when abroad.

This account also lets you set up standing orders (fixed monthly payments) and direct debits (variable monthly payments) which can be put in place to automatically pay subscriptions and regular bills such as those for utilities like telephone and electricity. You also have access to the BACS (Bankers Automated Clearing Service) allowing you to make and receive one-off payments to your account.

If you have a current account you can also negotiate overdraft facilities with your bank. This will let you spend more than you have in the account up to a previously agreed limit to allow financial flexibility for times when your funds are under pressure. The banks do charge for overdrafts and costs vary from bank to bank so take this into consideration when choosing your bank. You should never overdraw on your account or exceed an agreed overdraft limit without the banks agreement in advance.

The Savings Account.

Savings accounts normally require you to keep a minimum deposit in the account at all times. They pay higher rates of interest than basic or current account (many of which pay no interest at all) and although you have access to your funds, the process of withdrawing money is not as simple and immediate as with other personal accounts. The savings account is really meant to be used as a secure place in which to keep money you can afford to save for a period of time, with the benefit of earning interest on your deposit. It allows you to make your money work for you without you having to manage it through investments.

The Business Account.

If you are running a business a bank account is an essential tool of that business. The account will function very much like the current account with regard to overdraft facilities, which can give great flexibility in managing unexpected costs and cash flow problems. It will also have a cheque book but not generally ATM, debit or cheque guarantee cards. Before opening your business account talk to the bank and satisfy yourself that the terms they offer are competitive, and perhaps more important, that they are aware of the nature and needs of your particular business, and are enthusiastic and supportive.

Whether you are opening a personal or business account make sure the bank you choose offers competitive rates, offers the services and facilities you need and cares about you as its customer.

Check the MarketProSecure UK provided Current Bank Accounts and Savings Account offers for review and secure online application.

Published: December 1, 2007

Bookmark this page

For more new articles see our Learning Center section.