Choosing a bank account isn’t something people tend to put a lot of time in to. They’ll spend hours comparing quotes for car insurance, loans and credit cards, but day to day banking tends to take a back seat in the world of personal finance.
Those who take the time to look at their options will see that there’s a lot more on offer than just a basic bank account, and there’s likely to be a few options available that can help you make better use of your money. From reward accounts to high interest current accounts, there’s something to suit most bank balances out there.
Basic Account
This is one of the most commonly used accounts, and it’s ideal for receiving automated payments, paying for items via direct debit, shopping online and just about all the normal things you’d expect a straightforward bank account to do.
There’s usually a low fee attached to the account, and most banks will offer some for of basic account for free. While it’s an efficient and simple way of storing your money, a basic account doesn’t tend to come with many benefits.
Packaged Accounts
Packaged accounts typically have a low monthly fee, but come with a range of benefits like breakdown cover, mobile phone insurance, lower rates on overdrafts and other perks.
To take full advantage of a packaged account you really need to find one which suits your needs. For example, if you don’t drive and you never use your overdraft then there’s probably a better account out there for your needs. If you’re paying for breakdown cover elsewhere and you’re prone to losing your phone, then a packaged account could save you money with the benefits it provides.
High Interest Current Accounts
Some providers are offering current accounts with a higher rate of interest, particularly if you maintain a balance over a certain amount. While there aren’t many of them available, some even offer a better rate of interest than some common investment options (such as ISAs).
These accounts can be a great way of putting your money to work while also providing you with easy access to your cash in the event you need it.
Jam Jar Accounts
Designed to help those who struggle with budgeting, jam jar accounts divide your money into different ‘pots’ for things like bills, food and rent to help make it easier to manage your money. They can come with a small monthly fee, but many feel it’s worth it for the security of knowing there will be money available to cover their expenses each month.
It’s not the most efficient use of money, but if you have a history of struggling with money management it can be worth a look in the short term.
When you have a chance, take a good look at the terms and conditions of your bank account and see if any of these features are available. Many people have a packaged account and either don’t know about or don’t take advantage of the benefits available. If you’re not taking advantage of them, shop around for a new account which better suits your needs.
I think I am not so it’s time to make most of my bank account. Thanks for the info Pauline.
I am still in the process of making the most of my bank account. And, I think Pauline what you detailed here is really helpful. Thanks.
You may want to talk to financial institutions – bank or credit union, and find out what types of accounts they have available. It is best to do your research and figure out which account will suit you best.
I had no idea there were all these other types of accounts out there. I am definitely not using my account to it’s full potential. Thanks for sharing!