Bank account cheat sheet

The right kind of bank account can really help you build a brighter financial future. There's plenty of options available. Our handy bank accounts cheat sheet breaks down every type of account, arming you with the know-how you need to choose the best way to look after your money.

To help you out, we've created a simple cheat sheet outlining the different types of accounts available.

Bank accounts cheat sheet

Bank accounts cheat sheet
Account type Choose it if Things to know
Current Account

A day-to-day account with a bank or building society
You need full banking facilities including:

✔️ Setting up Direct Debits, standing orders & access to the Faster Payments Service

✔️ An optional overdraft

✔️ A debit card to use for online purchases, in stores and at ATMs in the UK
❗ Sometime these accounts are free, sometimes there’s a monthly fee

❗ Additional charges may apply for things like withdrawing cash abroad or going over the overdraft

❗ Usually will require a hard credit check to open the account
Basic account
(also known as a cash account)

A current account with limited features
You just need an account for your income and making payments

With a basic account you can usually:

✔️ Set up Direct Debits & standing orders

✔️ Get set up with online banking

✔️ Use your debit card at UK ATMs

✔️ open one without a credit check
You won't be offered:

❌ Cashback

❌ Overdrafts

❌ Cheque books

❌The chance to earn interest
Student Account

A current account for people in higher education
You need an account during your studies that also offers:

✔️ A 0% overdraft for anyone aged 18+

✔️ Perks like railcard discounts
Overdrafts are debt. Be careful of overspending during your studies, or you may leave education with additional debt to pay off when the 0% interest period ends

❗ You’ll need to provide proof of your education status

❗ Usually will require a hard credit check to open the account and/or apply for the overdraft
Packaged Account

A current account with added benefits
You think you’ll use the packaged products, which could include things like:

✔️ Travel insurance

✔️ Mobile phone insurance

✔️Vehicle breakdown cover

✔️ Higher interest rates

✔️ Discounts
❗ Usually has a monthly fee
Joint account

An account shared by two or three people
✔️ You want to allow multiple people to access an account’s money and facilities

✔️ You want to manage shared finances with your partner, housemates or family members

✔️ Current accounts

✔️Savings accounts

✔️Packaged accounts

✔️Credit cards
❗ When you open a joint account, you agree for your credit reports to be linked

❗ Other people’s financial behaviours could impact your personal credit score

❗ Accounts can often be opened online or in branch

❗ All named parties will need to be present to close the account

❗ Everyone named will be equally responsible for the account, i.e. paying fees

❗ All parties have the right to withdraw all the money at any time
Children’s account

An account to help your child get used to responsibly managing their money
✔️You want your child to learn good money habits

✔️They are below the age of 18

✔️ You want an account that helps to stop them overspending
❗ If the child is under 16, a parent or guardian will typically need to open the account on behalf of their child

❗ These accounts usually have restrictions to help control the account
Instant access savings account

An account that helps you save, but still withdraw money any time
✔️ You want to keep savings separate from your day-to-day accounts

✔️ You want instant access to your money
❗ Without full transactional services, you’ll normally need a current account too
Fixed term savings account

An account where you commit your savings for a set period
✔️ Want higher interest rates on your savings

✔️ Are happy to lock your money away for a large chunk of time
❗ There are usually penalties for removing your money early, such as paying a fee
Cash ISA (individual savings account)

A savings account where you won’t pay tax on interest you earn
You want:

✔️ Tax-free savings

✔️ A good rate of interest
❗ You’d lock your money away for at least a year

❗ The amount you can save each year is limited (£20,000 in total)
Investment ISA

An ISA where your money is invested for a potentially bigger return – but you also risk getting back less that you put in
✔️ Want a way to start investing with little effort ❗ Make sure you understand (and are happy with) the risk involved
Lifetime ISA (Lifetime Individual Savings Account)

A savings account for long-term goals of buying your first home or for retirement

✔️ Are saving a deposit for your first home valued at £450,000 or less (the UK Government is currently topping Lifetime ISA deposit savings up by 25%! That’s an extra £1,000 for every £4,000 you save in a tax year)

✔️ Are saving a personal pension for your retirement

✔️ Want your savings locked away until you’re ready to either buy your first property, or to retire (60 onwards)
❗ You need to be aged 18-39 to open a Lifetime ISA

❗ If you withdraw early/don’t use the money for the house deposit/retirement, you will lose the 25% Government top up

❗ People diagnosed with terminal illness can withdraw without losing the 25%

❗ You’re only eligible to use it to purchase property if you have never owned property before

❌ You can’t pay in after 50 years old

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