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
||What is it?
||Why choose it?
||A day-to-day bank account — in some cases for a monthly fee.
||If you need full banking facilities including Direct Debit, faster payments, and a debit card.
|Basic account (also known as a cash account)
||A current account with limited features (no Direct Debit or overdraft facilities). Often, no credit check is required to open one.
||If you just need an account for managing your salary and making payments.
||A current account with added benefits — usually for a monthly fee.
||Only if you think you’ll use the packaged products (things like travel insurance and breakdown cover).
|Instant access savings account
||An account that helps you save, but still withdraw money any time. Without full transactional services, you’ll normally need a current account too.
||If you want to keep savings separate from your day-to-day accounts, but want instant access to your money.
|Fixed term savings account
||An account where you commit your savings for a set period in return for better interest rates. There are usually penalties for removing your money early.
||If you want higher interest rates on your savings, and are happy to lock your money away for a large chunk of time.
|Cash ISA (individual savings account
||A savings account where you won’t pay tax on interest you earn. The amount you can save each year is limited.
||If you want tax-free savings, a good rate of interest, and are happy to lock your money away for at least a year.
||An ISA where your money is invested for a potentially bigger return — but you also risk getting back less that you put in.
||If you want a way to start investing with little effort. Just make sure you understand (and are happy with) the risk involved.