When you put your hard-earned money in a bank account, you want to make sure you're getting the best deal possible. Because of this, you need to compare bank accounts and savings accounts very carefully. There are two main types of bank accounts that people use to handle their money every day: a basic account and a current account. There's also a savings account for long-term money management.
If you worry that you won't be able to keep track of your spending, a basic bank account may be the best choice for you when you compare bank accounts. With a basic account, you can still take money out for your own use and pay any bills that come up. But if you have a basic account, you can't spend more than you have in your account. In other words, you won't be able to borrow money from someone else.
Many people like that the basic account is limited in what it can do. It makes them follow rules that, for whatever reason, they can't make themselves follow. You'll get a cash card with a basic bank account. This card can be used to get up to an agreed-upon amount of money from any bank's ATM.
Some simple bank accounts come with debit cards. This will also let you buy things without having to use cash, and in some cases, you can even pay online with a debit card. But the debit card won't put you in debt, just like the cash card. Also, if you have a basic bank account, you won't get a chequebook, and even if you ask for an overdraft, you won't get one.
The current account is the other type of bank account that lets you do day-to-day things like get cash or pay bills. With a current account, you have to be more careful because it is possible to spend more than you have. A current account requires you to be more careful with your money.
But this is the most common type of bank account, and millions of people all over the world use one very well. They might overspend sometimes, but they are confident that they can handle their money well enough that they won't have any long-term problems.
If you have a checking account at a bank, they will give you a cheque book. You will also get a debit card and a bank guarantee card, both of which will make the checks you give us valid. You will also be able to set up direct debits and standing orders, and you will be able to use the BACS system to accept money from other sources, like wages from an employer. You will also be able to set up a bank overdraft, as long as the bank gives you permission first.
The savings account is the other kind of bank account. This account, as its name suggests, is used to invest savings. Most banks have a wide range of savings accounts to choose from. When comparing savings accounts, you should think about the different kinds, which include, but are not limited to:
Internet savings accounts can often give you better interest rates because they cost less to set up and manage. This means that the money they save on overhead costs can be given to you.
- Instant access savings accounts: These are like current accounts in that you can get to your money right away without being charged.
Notice savings accounts: To get money out of this kind of account, you have to give a certain amount of notice.
Fixed-rate savings bonds offer a fixed rate of interest that is guaranteed for the time that your money is invested.
- TESSA only ISA accounts: This is a Tax Exempt Special Savings Account, which means that the interest is not taxed, but the investment must be made for at least five years.
- Child savings accounts are special savings accounts for kids, which are usually split into two groups: kids under 12 and kids between 13 and 17.
- ISA accounts: With these, you can invest a certain amount each year and keep the interest tax-free. There are two types: mini and maxi.
Interest will be added to all bank accounts. In fact, it's hard to compare bank accounts or savings accounts without including the interest rates. How much interest you get will depend on the rate offered and how much money you put in. In general, either a basic account or a current account will earn less interest than a savings account.
