It can be confusing when you come to search for a bank account, lots of different companies all competing for your business and all with different perks and names for their products.
You should try not to be dazzled by offers such as free CDs, mp3 players, vouchers, or prize draw promotions as it is the actual product that counts rather than the joining incentive. You should think about your needs when trying to find a Bank or Building society and look at the ways they offer you to deposit and access your money…
- Is your money accessible from any ATM machine free of charge? Or will you be liable for charges if you use a different machine?
- Can you use the same card to make purchases in the high street?
- Is your money accessible using your cash point card abroad?
- Does the bank have external facilities so you can deposit money or cheques out of hours?
- Can you access or pay in to your account using other institutions such as post offices or exchange bureaus?
Deciding which location is easiest as a base for your home branch can be important; if you plan on visiting the branch regularly, perhaps it would be easier to have one near to your home or on one of your regular commuting routes.
Another important thing to consider is the account services that your account provider can offer you, such as telephone or internet banking. Telephone banking can prove to be useful for checking your balance from home or on the move. Often these services allow you to pay bills, make standing orders and transfer money between your different accounts, if you intend to use telephone banking regularly you should enquire as to whether this is a 24hour, 365 day service.
Internet banking is another useful means to make enquiries and use your account services. Many institutions provide internet services free of charge these days, obviously there are slight security risks associated with internet services so always read all security advice available if you are not totally savvy.
It goes without saying that there are different types of bank accounts to choose from:
- Current Accounts – This is the most common kind of bank account and almost a must have in today's society. Most people get paid their wage directly into their current account and then draw out the funds as and when required and pay bills using direct debits or cheques from the balance. These accounts commonly come with cheque books, cash point/debit cards and optional overdrafts. Often the rate of interest you receive and the amount of overdraft you are liable for depends on the amount of receipts regularly into the account.
- Saving Accounts – If you have a lot of savings or large sums of money sitting about it is advisable to put the monies into some form of savings account, rather than leaving it in your current account, as this will gain you higher rates of interest. There are many types of savings accounts available, often the higher rates of interest are achieved from accounts which limit how regularly you can withdraw from the account, require prior notice before making withdrawals, or that require regular minimum payments into the account. Tax free accounts can also be obtained but legislation stipulates the amount you can save and how often you can access it.
Statements are another important aspect of banking. Banks can offer monthly, quarterly, or even annual statements depending on what you require, or perhaps you simply wish to have a 'paper free' account where by you check your statements online or via email.
When Changing banks it is important to make sure that all your direct debits are transferred and that your employer knows where to pay in your wages. Some banks offer services that will do all this for you where as others will simply provide information packs to assist you in the process.
Remember, you can have more than one bank account with more than one institution. Some banks may offer you better rates for your savings whilst other banks and building societies may offer appealing levels of interest for current accounts and overdrafts.
If you are generally happy with the services that one institution provides this could be advantageous to you, building a long term relationship with your bankers can give you favourable rates with them for different products and have the advantage of having everything under one roof. Switching banks too often can also show up on your credit report.
You should make your money work for you and get the best you can out of it, shop around compare rates and get the best you can out of your current financial situation and think about how your account choice will affect you, long term.