Bank accounts are a great place to keep your money – and there are two main types...
A current account is good if you:
- Want a safe place to keep your cash
- Aren’t too bothered about earning interest
- Want easy access to your money
- This is where you do all your day-to-day banking, like paying your bills and buying things. And, if you’re earning money, you’ll probably need a current account so you can get paid.
You can keep track of your current account by regularly checking your bank statements – these show how much has gone in and come out. They’ll normally be posted to you. Or, if you’re registered for online banking, you can look at them online.
Some current accounts will also offer you a cash or debit card so you can take out your money from a cash machine, whenever you want. Debit cards will also let you buy things in a shop or online.
While your money’s in a current account, it may grow a little if it’s earning interest. (Interest is money the bank gives you for keeping your cash in their account.) And the more money you have, the more interest you could earn.
It’s wise to shop around before choosing your account – and consider the interest rates. However, if you want a high interest account to help you to save, you’d be better off choosing the second kind of account…
A savings account is good if you:
- Want to save up
- Want to earn more interest
- Are happy to lock your money away for a while
If you’re trying to save up, put your money into a savings account instead of a current account, because they normally have a better rate of interest. All savings accounts will have different interest rates (worked out as percentages). The higher the percentage, the better the interest rate.
You’ll also need to consider the ‘terms’ of the savings account because, again, they’re all different. The terms are a set of rules you agree to. Some accounts will want you to put your money away and not withdraw any for a set period of time, like one to five years. Generally, the longer your money is locked away, the better interest rates you’ll get.
Make sure you compare the interest rates and the terms of different savings accounts before you choose one.
It’s OK to have both
You’ll find that most people will have a current account for everyday banking and a savings account for saving money. Have a think about what you’ll want to do with your money and decide whether you’ll need both – or just one.
Keeping on top of your money
There are different ways to manage your bank accounts. They are:
- In branch
- Over the phone
- On your mobile
- On your compute
How would you most like to do your banking? If you think you’d do a lot of it on your mobile, make sure the bank you’re interested in has a good mobile app. Or if you’d prefer to do your banking face-to-face, check that your account will allow you to pop into a branch (some accounts will only let you bank online).
Important info for under-18s
There doesn’t tend to be an agreed age limit between banks on when you’re allowed to apply for certain accounts and things like debit cards, credit cards and online or mobile banking. This means you might need to shop around to find a bank that offers the services you want to people your age.
And remember, if you’re under 18, you’ll probably need your parents’ help to open your account.