Finance Fridays – Bank Current Accounts

Welcome to this week's Finance Fridays. Last week we were looking at how to get money back from your shopping through using cashback sites. This week it's about where your money is kept on a day to day basis – bank current accounts. There seems to be several television advents around at the moment telling us how great certain banks' current accounts are. From Jessica Ennis-Hill spending lots of money on frothy coffees to the exasperated dad, played by the guy who used to be in London's Burning, worrying about his household bills. Is it worth just sticking with a simple, free current account where you pay in and it just comes out or do you switch to one where you may have to pay or meet certain conditions in order to get additional features and benefits? Let's have a look at what is being offered by the high street banks at the moment.

Barclays

At the moment Barclays are offering three types of current account. Their Premier Current Account is probably not an option for most people as you need to pay a gross income of over £75,000 p.a into the account or invest over £100,000 with Barclays.

For more humble folk Barclays has their standard Barclays Bank Account. This is a free account with all the standard banking privileges. For a monthly fee of £3 you can join the Barclays Blue Rewards. You also need to pay in at least £800 a month and have at least 2 direct debits going out of the account. In return Barclays will give you back £7 a month plus further amounts if you have a residential mortgage and/or home and contents insurance with them. There's also a cashback scheme if you use your account to buy items at certain retailers, energy and broadband providers.

If you have problems opening a bank account with other banks then Barclays also have a Basic Current Account. This has a debit or cash card with it but no overdraft facility or chequebook. Basically it you don't have the money you in your account you can't pay it out. You can track of your account online still and have free text alerts set up if you need to know details about your account balance.

Halifax

Although it still seen as building society by many people Halifax is a full bank and have been known for some time as a bank that likes to reward its customer. It has a free Current Account with all the basic features but if you want to put a 'Control' in place to stop you going into an unplanned overdraft this costs £10 a month. If you register for mobile or online banking you can also be part of the Cashback Extras. There is no minimum amount that you need to pay in each month for this account so for low earners or those simply looking a second separate account this may be suitable.

If you can pay in more than £750 a month, have at least 2 direct debits going out and stay in credit then the Reward Current Account could be for you. This pays £5 in your account each month if you keep to the terms previously stated. You'll also get £100 for switching to this account and the chance to win £50,000 in the February 2016 Switcher draw.

The fee payable account offered by Halifax is the Ultimate Reward Account. It will cost you £10 a month if you pay in £750 a month, pay out at least 2 direct debits and keep in credit. If not you will be charged £15. For this fee you will receive in return benefits such as travel insurance, mobile phone insurance and breakdown cover. Before you sign up make sure you will use these benefits, that they offer the full cover you need and that you aren't already paying out for them elsewhere.

HSBC

There's a dizzying array of accounts on offer from HSBC. If you just want a simple bank account with no monthly fee they offer three – Bank Account, Advance and Basic Bank Account. None of these have a monthly fee but some do have terms and conditions that need to be met. For an account with no overdraft and no minimum amount into the account each month there's the Basic Bank Account. You get a debit card and the facility to set up standing orders and direct debits.

If you want a few more frills to your account then there's the Bank Account. You need to pay in £500 a month, however if you are under 24 this is waived. There's an overdraft facility plus you can apply for certain savings accounts which are only for HSBC banking customers. Simply this is a straightforward account without any fuss.

Similar to the Bank Account is the HSBC Advance. You need to be paying in £1,750 a month and on top of the Bank Account's features you get preferential rates on saving accounts, mortgages plus a vague range of discounts.

Another free account is the HSBC Premier but you need to have savings or investments of at £50,000 with the HSBC in the UK or have an individual annual income of at least £100,000 and either a mortgage, investment, life insurance or protection product with HSBC. This entitles you to a 'Relationship Manager', a 'Premier Client Manager' for your wealth management needs and travel insurance for your family.

The only current account with a fee is the Bank Account Pay Monthly. For £10 a month you get an emergency overdraft buffer of £50 for which there is no further fee apart from the interest charges. If you find you have a bit of a cash flow problem regularly throughout the month this may be something to look into.

Lloyds

Now back to just Lloyds after their split from TSB they offer two free account and two fee based accounts. There's the standard Classic Account but if you can pay in £1,500 a month then the Club Lloyds account pays out interest. The interest rate is tiered according to your account balance and is applicable to balances up to £5,000. You can also have a choice of 'Lifestyle Benefit' such as cinema tickets or a magazine subscription. If you don't put in at least £1,500 a month then a £5 monthly charge will be levied.

For the fee payable accounts there's the Silver and Platinum accounts. For £9.95 a month the Silver account gives you AXA European and UK travel insurance for you and your partner, AA Breakdown cover (doesn't include home start) and mobile phone insurance. For £17 a month the Platinum account gives worldwide travel and AA Breakdown cover including Relay and Home Start plus the mobile phone insurance. These are pretty high account charges so make sure the benefits that go with are worth it and something you would use.

Nationwide

Although Nationwide isn't actually a bank but in fact the world's biggest building society it provides financial services including current accounts just as banks do. The basic Nationwide Cash Card account is changing on 1^st December 2015 to the new FlexBasic account and will include a contactless card option and the £15 fee for unarranged overdrafts has been dropped. Customers of the FlexAccount also get UK and European travel insurance plus the option of a chequebook.

If you want to upgrade the FlexPlus account at £10 a month and there's a range of benefits from breakdown cover, worldwide travel insurance, mobile phone insurance, extended warranties on household appliances plus interest payable on account balances up to £2,500. If like the idea of getting interest on your current account but don't fancy the monthly fee then there's the option of the FlexDirect account. You will need to pay in at least £1,000 a month and the direct aspect of this account is that upon opening telephone and internet banking is set up.

NatWest

For NatWest at the moment it's all about the new Rewards accounts they are offering. There's still the free Select account which is the standard current account but for monthly fees ranging from £3 to £28 you get a number of benefits going up in scale. One of the selling points of these accounts is that they give 3% cashback on household direct debits paid out of the account. You need to check if your provider is included but council tax is eligible as well as the main gas, electric, water, mobile phone, landline and internet companies. As the monthly fee increases so do the benefits such as travel insurance, mobile phone insurance and car breakdown cover.

RBS

Since NatWest and RBS share the same parent company it's not surprise that that their current accounts are remarkable similar in both name and benefits except for two essential areas. There is no starter £3 monthly account but instead fee payable accounts start at £10 and there is no rewards or cashback scheme! Next year RBS are relaunching Williams and Glyn Bank and their customers will be moving to this new bank. This is probably why they haven't caught up with NatWest at the moment.

Santander

Abbey National, Abbey and now Santander. This is a bank that has come a long way from its cosy building society days. Just like most of the others they other the no overdraft basic account, a free standard account and a £10 a month account with no overdraft fees. What they are really trying to push at the moment is their 1|2|3 Current Account. The monthly fee is £2 currently but this is rising to £5 from 11 January 2016. You also need to put in at least £500 a month and have 2 direct debits going out. In return you will receive cashback on selected household bills, interest on your account balance if you have at least £1,000 in the account and access to saving rates and loans at preferential rates.

TSB

Back in the day you would see branches of the Trustee Savings Bank around the country. They then fell in with Lloyds to become Lloyds TSB and now they have fallen out and gone it alone again as TSB. Since some of the old Lloyds customers found themselves on the TSB side when the pair split they have been trying to woo customers to stay with them and entice new ones. The Classic Account is quite simple but if you can pay in £500 a month you are eligible for the Classic Account Plus. This is a free account but currently pays 5% AER interest on balances up to £2,000 and 5% cashback on the first £100 spent through contactless card payments each month.

Despite the split from Lloyds on the high street they still share the same parent company and this is evident in the fee payable accounts. Not only do they share the same names but also the same monthly fee and benefits.

Is your bank account free? Do you take advantage of the benefits available or are you paying your bank needlessly?

Account details correct at time of writing. Please read the full terms and conditions before opening or switching your bank account.

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