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Current Accounts
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Current accounts.
The most common form of account that banks and building societies offer is a current account. A current account will allow you to access your money instantly once you have paid your money in.
Your money is then looked after, or ‘held’, at your local branch in an account under your name. This account will be given a special account number. This is normally an eight-digit number, which follows a ‘sort code’ comprising of a six digit number set out in three sets of two. When written next to each other, your sort code and account number may look like this.
01-01-01 12345678
The sort code identifies the branch where your account is held. Your account number identifies the account in which your money should be paid into, or withdrawn from.
A current account will normally be placed in just your name, and is referred to as a ‘sole’ account. However, some people may hold an account with another person, such as their partner, and this is known as a ‘joint’ account.
When you open a current account, you will normally be expected to pay some money into the account straight away. This amount could be anything from £1.00 upwards. Once there is money in the account, you’ll be able to withdraw some or all of it, as and when you need it.
Any payments, either in or out of your account, are referred to as ‘transactions’. The main types of transactions can be referred to in any of the following ways:
- a credit- any payment that is added into your account
- a debit - any payment that takes money from your account
- a withdrawal- when you take cash out of your account
- a deposit- when you pay money into your account
The amount of money that you have in your account at any given time is known as the account ‘balance’. Sometimes, when you ask for your balance, it will have either a ‘CR’ or ‘DR’ printed next to it. When it has a CR, it means that you are in credit, or have your own money in it. When it has a DR, it means that you are in debit or ‘overdrawn’, which means that you then owe the bank money.
When you open your current account, you may be given some of the following items. To find out more about the item, click your mouse over the top of the item.
Cashpoint card
Chequebook
Cheque Guarantee card
Debit card
Direct Debits and Standing Orders
Overdrafts
Paying-in slips
There is no legal age limit at which you can open a bank account but a bank manager will decide on whether to allow a child or young person to have an account. There are, however, restrictions on opening certain kinds of accounts for young people, for example, a young person under the age of 18 will be refused an overdraft on the basis that they are too young.
If you are employed, then a current account is essential, as most employers will pay your salary or wages directly into a bank account for you. This is more convenient that having to wait for a cheque to clear, and is safer than getting paid in cash.
If you are applying for, or already have an overdraft, then you should make sure that you know what charges will be made should you go overdrawn. Most banks and building societies will make some pretty hefty charges if you start owing them money. Make sure you ask them about the kinds of charges that you may incur with their account. And try to use your overdraft only when it is absolutely necessary. It’s better to be safe than sorry.
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