A current account is the financial hub of most people's lives. Salary goes in, bills come out, and day-to-day spending flows through it. Yet many people stay with the same bank for years — sometimes decades — without ever questioning whether their account is actually working for them.
This guide explains what to look for in a UK current account, the main types available, and what the Current Account Switch Service means for you.
What is a current account?
A current account is a bank account designed for everyday transactions. Unlike savings accounts, current accounts are meant for regular use — paying in your salary, setting up direct debits, making debit card payments and withdrawing cash. Most come with a debit card, online and mobile banking, and the ability to set up standing orders and direct debits.
What to look for in a current account
Monthly fees
Most basic current accounts in the UK are free to use. Some accounts charge a monthly fee — typically between £5 and £25 — in exchange for additional benefits such as travel insurance, breakdown cover or cashback on bills. Whether a paid account is worthwhile depends on whether you would use the benefits and whether their combined value exceeds the monthly fee.
Overdraft terms
An overdraft allows you to spend more than you have in your account, up to an agreed limit. Since 2020, all UK banks have been required to charge a single annual interest rate on overdrafts — typically between 19% and 40% — rather than a mix of daily fees and charges. If you regularly use an overdraft, comparing rates between banks is important.
Switching incentives
Many UK banks offer cash bonuses of £100 to £200 or more to attract new customers switching via the Current Account Switch Service. These are genuine cash payments, though they often come with conditions such as paying in a minimum monthly amount or setting up a certain number of direct debits.
Interest on balances
Some current accounts pay interest on money held in the account, though rates have varied significantly over time. If you regularly hold a significant balance in your current account, it is worth checking whether your account pays interest — though a savings account will generally offer better rates for money you do not need day to day.
Cashback on bills
Some accounts offer cashback on household bills paid by direct debit — utility bills, broadband and similar. This can provide a meaningful annual saving if you pay significant bills through your account.
App and digital features
Digital banking has improved significantly. Features worth looking for include instant payment notifications, spending categorisation, savings pots, freeze/unfreeze card options, and international payment capabilities. Digital-only banks such as Monzo, Starling and Chase have been particularly innovative in this area.
FSCS protection
Your money in a UK bank account is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per person per authorised institution. This means that if your bank were to fail, you would be covered up to this amount. Always check that any bank you use is FSCS protected — most major UK banks and building societies are.
Types of current account
Standard current accounts
The most common type. These offer core banking features — debit card, direct debits, online banking — usually for free. They may or may not include an arranged overdraft facility.
Packaged accounts
These charge a monthly fee but include additional benefits such as travel insurance, mobile phone insurance, breakdown cover or preferential rates on other products. They can represent good value if you would otherwise buy these products separately, but are poor value if you do not use the benefits.
Basic bank accounts
Designed for people who do not qualify for a standard current account — for example, those with poor credit history or no credit history. Basic accounts typically do not include an overdraft facility but allow you to receive income, pay bills and make debit card payments. Banks are required to offer basic accounts to eligible customers.
Student accounts
Available to students in full-time higher education. They typically include an interest-free overdraft, which can be a valuable feature during term time. The overdraft limit is usually lower in the first year and increases in subsequent years.
Digital-only accounts
Provided entirely through a smartphone app, with no physical branches. Banks such as Monzo, Starling and Chase (UK) offer full current account functionality with strong digital features. All major UK digital banks are FSCS protected.
The Current Account Switch Service
The Current Account Switch Service (CASS) makes switching your bank account straightforward. Once you apply to open an account with a new bank and request a switch, the service automatically transfers your direct debits, standing orders and incoming payments to your new account within seven working days. Your old account is then closed.
Any payments sent to your old account are automatically redirected for at least three years. The service is free to use and is backed by a guarantee — if anything goes wrong with the switch, you will be refunded any charges or interest incurred as a result.
You can switch as many times as you like. If your existing bank offers a switching incentive, make sure you meet any conditions — such as minimum monthly pay-in requirements — before applying.
Things to check before switching
Before switching, make a list of all direct debits and standing orders on your current account — these will transfer automatically, but it is useful to have a record. Check whether your current account has any linked products (such as a savings account or overdraft) that may be affected. And read the terms of any switching incentive carefully to ensure you qualify.