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If you're looking for a bank account, either because he wanted a new one
or because you're thinking of switching, it can all seem very overwhelming.
Before you look at what the banks and building societies are offering,
it's best to start by thinking about why you need a bank account.
Perhaps you need an account to have your wages or benefits paid into,
and you might want to set up direct debits all standing orders to pay your
household bills.
You probably want to be able to take money out of cash machines
and pay for things with a debit card. So
having decided on the things you need, now's the time to look at the types of
bank account that are available
and work out which one is best for you. Current accounts are good for managing your
day to day money.
Your wages or benefits can be paid straight in. You can set up direct debits
and standing orders for paying bills.
You get a debit card that also lets you take money out of the cashpoint and you
usually get a cheque book too. Most current accounts allow you to go overdrawn.
So you'll have to pass a credit check when you apply for one. If you do go into the
red
it's likely that you'll pay fees and interest. If there's not enough in your
account to cover a direct debit or standing order,
you'll probably have to pay extra charges. Basic bank accounts give you most to the
same things as a current account.
Your wages or benefits can be paid straight in.
You can set up direct debits and standing orders, and you normally get a
debit card it also lets you take money out of the cashpoint.
The main difference is they don't let you go overdrawn.
So there's no credit check two pass and no overdraft fees
interest to pay. But they normally do still have charges for refused direct
debits and standing orders.
Jam jar accounts - also known as budgeting or rent accounts - are not as common as
basic bank accounts
but are growing in popularity. They let you receive wages and benefit payments,
set up direct debits and standing orders. And you'll normally get a card for using it
cashpoint machines
or a prepaid card. They let you divide your account into different jars,
so that you can keep your spending money separate from money for bills or rent.
You can't go overdrawn so there's no credit check to pass
and no fees or interest to pay. And they don't charge you for refused direct
debits or standing orders,
however they do normally charge a monthly fee. So hopefully now you know
which type of account would be best for you.
It's time to shop around. One way to do this is to use the Money Advice Service
comparison table
to check out what each account can offer.
Don't forget to look at credit unions too. These are not-for-profit organisations
that offers savings accounts and loans to their members.
Some of them also offer current accounts and jam jar accounts.
For more about how to open the account you chosen
and how to pay bills out in your account, watch our other videos
and go to our website.