Having a current account ensures that your money is safe and if you are trying to save money a bank account is a good way of putting funds aside. A bank account can benefit you by making your life easier in terms of managing your finances, paying bills and receiving money from elsewhere. There are a number of different types of bank accounts, all which can suit your needs and requirements. These include current accounts, packaged accounts, savings accounts and joint accounts. It is advisable that before opening a bank account you make sure it is right for you. For instance if you are saving money a savings account may be your best option as your money collects interest and therefore value. If you are married then a joint account might be best.
If you opt for a current account, which is most common, you will receive a debit card which is used for withdrawing money and with your debit card payments can also be made online. With a current account you will most likely be offered overdraft facilities. An overdraft can be useful in some cases as if you find yourself struggling to make ends meet an overdraft can help you pay bills and with any urgent payments. However there are risks involved as often interest is charged for the amount overdrawn. It is important to remember to look at the terms and conditions laid out by your bank for whatever bank account you choose to open and make sure you are notified of any changes the bank makes.
Times are over when people put money in a stocking or under the mattress – nowadays most adults have a bank account. The money on a bank account is safe – and on a current account it is easy to receive one’s salary and wages and pensions. Bank accounts are also used to make payments, withdraw cash, and to set up standing orders or direct debits. All this, except withdrawing cash, usually can be done 24 hours a day online without having to leave the house.
If one wants to save some money to either put aside for later or getting closer to making a wish come true there are different kinds of savings accounts available. The purpose of a savings account is not to move money but to leave it for a while and benefit from interest which on a current account will not be paid. Depending on one’s needs, one can choose a savings account on which the money cannot be touched during an agreed-upon a time and which benefit from high and fixed interest rates, or one can keep money on a savings account with daily access which still will gain interest and make one’s money grow.
Current accounts are provided by banks and building societies and are often offered with an overdraft facility. One usually will get a debit card, which makes it possible to withdraw cash and make payments in shops and restaurants. Sometimes a credit card will be offered as well, depending on your situation. Current accounts are needed to receive salary, benefits and pensions and to set up direct debits and money transfers. A basic bank account which will be offered is one’s credit history is not good enough for a current account.
Savings accounts are bank accounts which give the opportunity to make one’s money grow. Money is not moved around on a savings account and may not be accessed during an agreed-upon time. For this, the bank will pay you interest rates. A savings account is an ideal account on which to put money aside for the future. Before opening a savings account one should first compare the different types and find out which suits one’s personal situation best.
A savings account is probably the first account you will ever have. Savings accounts allow you to keep your money in a safe place while it earns a small amount of interest each month. Suppose you are given £1000 and you’re not going to use the money for another 3 months. You could do server things with the money. You could carry it around in your pocket, you could put it under your mattress or you could put it into a bank savings account. Putting money in savings account is a way of keeping your money safe. If you carry the money around with you, you might lose it, if the money is under your mattress you could get robbed and lose it but if the money is in a savings account it is safe! On top of this you are less likely to spend the money and the money in the savings account is insured. If you home is robbed or catches fire and is burnt down your money will be gone. However banks and credit unions keep your money safely locked away in fireproof safes.
Moreover savings accounts offer easy access to your money, your money becomes what is known as liquid which means you can withdraw it quickly. Furthermore when you have money in a savings account a great advantage is that savings accounts grow your money and your money earns interest. What happens is your bank savings account pays a rate of return on all the money in the account. That means that you technically get ‘paid’ for keeping your money in the savings account.