Introduction

Current accounts, often simply called bank accounts, are a facility for you to safely store your hard earned cash. Banks or building societies will keep hold of your money for you and dole it back out as and when you need it. And they will use the surplus cash they have hanging about in their vaults to lend to other customers. Since the banks earn a living by lending out your money, they will share some of the profits with you by paying you interest. And unlike their American cousins, most UK banks don’t charge a fee for day-to-day banking activities, such as online transactions or making a withdrawal.

Since current accounts are traditionally used for day-to-day banking activities, they often don’t leave a huge pool of money available for the banks to lend out. And for this reason, the amount of interest that banks pay to you is much poorer than savings accounts!