Since you will be paying a monthly fee for a package current account you should carefully consider whether you actually need the benefits on offer. If not, go with a basic bank account.
Breaking the terms of a current account can be very costly - and banks can be wilfully confusing when it comes to explaining the complexities of their penalty charges, making it difficult to compare the banking costs of different accounts. In order to avoid any charges you should always be fully aware of your overdraft limit and, if applicable, minimum monthly deposits. You should monitor your account activity carefully and, if necessary, you should plan ahead and contact your bank to arrange a temporary or permanent overdraft extension if you think you may need it.
There is nothing stopping you from switching your bank account as often as you like. With many banks offering switching incentives, shopping around can easily pocket you some extra cash or favourable interest rates on in-credit balances or overdrafts. See our "Switching current accounts" article for more tips.
With an increasing number of banks offering online and telephone-only accounts, make sure that your chosen account provides the access you need - you may not be able to change it later.
Since cheque payments are becoming increasingly rare many current accounts do not offer cheque facilities. Therefore, those still using the "old-school" payment method should make sure that a chequebook is included before signing up for a new account.
Don't be distracted by the flashy freebies - free iPods are all well and good, but a decent overdraft facility, low penalty fees and hassle-free account management are far more important when you're cash-strapped and away from home. Also, many banks stipulate that you can only have one student account - so make sure you check an account's terms and conditions before you think about opening a second one.
Tip: If you have a problem with the service of your current account provider your first step should be to complain to the bank itself. Ideally this should be done in writing - make your complaint clearly and concisely and keep copies of any correspondences between the bank and yourself in case you need them at a later date. If you do not receive a response, or you are unhappy with the bank's decision, you should then take you complaint to the Financial Ombudsman Service.
To compare current accounts from the UK's leading providers click here.
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Current Accounts Guides
- Choosing a current account
- Switching current accounts
- Student and graduate accounts guide
- Do you need a business bank account?
- Internet banking and security guide
- Should you get a packaged current account?
- Important considerations for your business banking
- Alternative Banking Guide
- Managed bank accounts guide
- How to complain about financial services
- Current accounts: considerations and warnings