Picking The Right Current Account

The Bank of England base interest rate, which is the foundation for the interest rates that banks set for everything from mortgages to savings accounts, was slashed to a record low of 0.5% in the aftermath of the financial crisis. Nearly three years later, it has stayed at that record figure, with most expectations being that it will remain unchanged for at least another 12 months. 

This has, undoubtedly, played a major part in helping Brits “deleverage”, or, in non-financial jargon, to pay off their debts. Mortgages are currently the cheapest that they’ve been for well over a decade, whilst a record £1/3 billion was paid off debt in the last month alone.

However, if you’re looking to save it’s not a great time to do it. Whilst standard advice suggests that any and all savings should be put into paying down debt, people still need to pay bills, buy food and all those other costs of day-to-day life which means that finding a good current account is a must.

Of course, before the recession one could expect to find a current account which returned a really good rate of interest, now, it’s harder to find. So if you want to find a really good account, you have to look beyond the headline figures, and see what other benefits you can get.

For example, current accounts from Santander (ignoring the interest rate for a moment) also give you access to a number of other services from the bank, cheaper than you would get if you didn’t have an account. With their Premium Current Account you get over £850 of additional benefits including travel insurance, health care protection and breakdown insurance.

All of which come together to make your life cheaper and easier. Banks are looking for customers to whom they can sell lots of products, so they offer bonuses to those who are willing to have many different products with them. Certain offer free cash withdrawal abroad, others offer special deals to mortgage customers, there really is a huge range of different deals available.

Which all comes together to make it somewhat tricky to pick the best account. After all, if you can’t decide just on the headline rates, how are you possibly going to know which is the one to go for?

The first step should always be to talk to your current bank, sometimes existing customers don’t get the best deals because banks are always trying to attract new customers. However, they still want your business, so threatening to leave is a fairly good way of seeing what other deals they can offer for you.

The next step is to do a quick bit of research. Start off with the big five British banks, although these may not all offer the best deal, because they’re the biggest they do offer a fairly good representation of the state of the market. Further, because all the information is on their websites, you don’t have to dig too far to find out which ones are better than others.

Last of all, take a look at one of the many independent financial advice websites out there, Moneysavingexpert is the best known, but there are others, and they can be a great way to find some of the best deals around.