What Is A Current Account?

A current account is a bank account designed for managing your day-to-day money. They are primarily used for receiving and sending regular payments, and for paying for things with a debit card.

Most current accounts can be accessed via a high-street branch, online, using mobile apps or telephone banking.

With a current account, you can do the following:

  • Receive wages, benefits, tax credits or pensions into your account
  • Set up payments out of your account to cover household bills and other commitments
  • Pay for things with a debit card
  • Write cheques to pay bills and individuals
  • Receive payments directly into your account
  • Set up Direct Debits and standing orders
  • Transfer money via telephone or online-banking
  • Withdraw cash over the counter or from an ATM
  • Check your balance using telephone or internet banking, at a cash machine or over the counter
  • Apply for an overdraft
  • Pay cheques into your account


Who Can Open A Current Account?

The exact requirements will vary by bank, but here are some of the criteria you may have to meet:

  • You will usually need to be over 16, or for some banks over 18. Some banks do however offer accounts for children.


  • Some banks will ask you to pay in a minimum monthly amount, usually from wages, benefits or a pension.


  • Because many current accounts allow you to have an overdraft facility, you might need to pass a credit check when you open the account.


  • All banks will ask for proof of identity and address before you can open a bank account.




How Much Does A Current Account Cost?

A current account won’t usually cost you money, as long as you have money in your account.

Withdrawing Money

It is usually free to withdraw money from an ATM in the UK. Some convenience machines – often those inside shops or in pubs and nightclubs – can charge up to £5 each time you use them. The law states that they must tell you about the charge before you go ahead with the withdrawal.

What Is an Overdraft?

An overdraft is a way of borrowing money through your current account, which must be agreed in advance with your bank. Effectively, it means you are given permission to spend more than you have in your account, up to an agreed limit.

Your bank will usually charge you interest or a fixed amount for lending this money. Some banks will offer an interest-free overdraft facility.

You may be subject to further charges if you spend more than you have available without arranging an overdraft, or if you go over your agreed overdraft limit. This is known as an unarranged overdraft. Current accounts now have a Maximum Monthly Charge (MMC) in place, which means there is a limit to how much you can be charged each month in fees, charges and interest on unarranged overdrafts. The amount varies by bank, so check with yours to find out what the MMC is on your current account.

Direct Debits and Standing Orders

Direct Debits allow a company – for example an electricity or gas supplier – to take money from your current account on an agreed date. It can be a useful way to make sure your bills are paid on time.

Standing orders are an instruction made by you to your bank to pay an amount from your current account to another account regularly. They are often used to pay rent or other regular payments to individuals.

If you have Direct Debits and standing orders set up on your current account, it’s important to make sure you have funds available to cover them, otherwise your bank could refuse them and you may be charged.