Choosing a new current bank account

A current account is an instant access bank account that is used for everyday deposits and outgoings. Most people will use a current account to receive their monthly salary, pay bills via cheque, direct debit or standing order, pay for items via a debit card and draw cash from an ATM. Some current accounts will also allow an overdraft facility and offer interest on a credit balance.

Current accounts are the most common type of bank account, and almost all banks and building societies offer them in some form. As competition for new customers is strong, many financial institutions will offer introductory incentives which range from discounted home insurance to free night club entry - so it’s a good idea to shop around for a good deal.

There are several types of current accounts to choose from, depending on lifestyle and individual circumstances:

Student Current Account: many banks offer current accounts that are tailored to the needs of students. They tend to offer low-interest overdrafts and incentives such as music vouchers, travel insurance and free DVDs and CDs.

Joint Current Account: these are perfect for couples who cohabitate and have a need for an account to pay for communal outgoings, such as bills and groceries.

Interest Bearing Current Account: some current accounts offer a higher rate of interest than others, so shop around if you want to find the best rate. Those that don’t offer overdrafts tend to have higher interest rates; however, keep in mind that if you want to earn maximum interest, a savings account will typically offer the best rates.

Internet Only Current Account: if you’re happy to bank exclusively online, than an internet only current account may offer a better rate of interest, as well as added convenience - especially if you lead a busy lifestyle. Banking online means you can check your statements, balance and other banking details from the comfort of your home, 24 hours a day.

Premier current account: if you're in a high wage bracket, a premier current account may be right for you. They tend to charge a monthly fee, but for this you'll receive a higher level of service and advice than from a regular account. They may also include annual travel insurance, car breakdown cover and discounts on package holidays. However, premier accounts don’t always offer the best value, as some of the freebies may not be of use to you - so it’s always worth thinking carefully as to whether you really need what they're offering. Premier current accounts are also known as packaged accounts.

So, when looking for a new current account, make sure you choose the one that’s right for you. Take your time; ask lots of questions and shop around – this way, you’ll find the one that best matches your needs.

Andrew Regan is an online, freelance journalist.