Nearly all of us have a bank account, but do we really know enough about this important part of our everyday lives?
Does My Bank Account Have Any Fees Attached To It?
Many bank accounts are ‘fees free’ so you can use them without the fear of any hidden charges. But you do need to read the ‘small print’ to make sure. If in doubt make an appointment with the bank to go in and discuss the matter in person. Banks obviously need to make money, so ask what their charges are for additional services. If in doubt always shop around for the best deal. Personal recommendations are usually best, so ask friends and colleagues where they bank and if they’re happy with their arrangements.
Banking fees and charges vary greatly from one bank to another. Visit their websites or contact directly for detailed information before proceeding.
Overdraft Fees – What To Look Out For
Many banks offer overdraft facilities to their customers, though charges may apply. An overdraft is not a loan, it is meant to act as a safety net in case you overspend. The majority of banks do not offer free overdraft facilities so check out the charges beforehand. Be very careful not to exceed an agreed overdraft limit because charges for ‘unauthorised overdrafts (where you have exceeded your limit) can be very high.
Unarranged overdraft fees *
|NatWest Current Account||£6 each day. The fee is capped at 15 fees per charging period (£90).No charges to unarranged overdrafts of under £10.|
|Santander 123 Account||£6 per day. The total overdraft fee cap in each monthly statement period is £95.|
|Halifax Current Accounts||Charges vary from £1 – £5 per day. Click here for details.|
If you already have a bank account, and feel that you have been charged unfairly for an overdraft, check out moneyadviceservice.org.uk for advice.
Look for Savings Accounts with the Best Interest Rates
If you are in a position to save money with a bank look for the best interest rates. Remember you do not have to stick with the bank where you have your current account. If they offer fees free banking, they will need to make their money from somewhere, so perhaps they don’t offer the best interest rates on savings. As always, shop around for the best deals.
Some of the top savings accounts currently available* (and higher rates may charge a fee)
|Bank Account||Santander||1.5% up to £20,000|
|Bank of Scotland||3% up to £5,000|
|Easy-Access Savings Account – Allows withdrawals||Yorkshire BS||1.15%|
|Fixed Savings – Cash locked away||Chartered Savings Bank||1.55% for 1 year|
|OakNorth Bank||1.71% for 2 years|
|NS&I||2.2% for 3 years|
What is a Direct Debit?
A direct debit is an instruction from you to your bank or building society to allow various organisations to collect varying amounts from your account. They are great for things like electricity, gas or phone bills where the amounts due vary from one bill to the next. But don’t presume that things will always run smoothly. If for any reason a direct debit fails to be paid or is late, you may still be liable to fall behind, so keep a regular check.
What is a Standing Order?
A standing order is a simple automatic and regular payment of a fixed amount of money that remains the same. Unlike a direct debit, it is you who decides for how much and when the amount is to be paid. Standing orders are a great way of paying fixed amounts such as rent or mortgage payments.
An increasingly popular form of handling your finances, ‘online banking’ can make your life far easier than the old-fashioned method of going into your bank to make payments or change details. And you don’t need to be too ‘internet savvy’ either! Most online services are very simple to understand and operate, and there are always online or telephone helplines available if you run into problems.
What If I Need a Short-term Loan To Cover An Emergency?
No matter how well we manage our finances, none of us can foresee an emergency when we may need a fast injection of cash to tide us over. A car breakdown, an unexpected boiler renewal or a roof repair – everyday things that happen to us all. The most obvious course of action may be to go to your bank to arrange an overdraft or loan but be wary!
Sometimes the cost of setting up these kinds of facilities can be expensive and take time to arrange. So, investigate your options carefully. If you are employed and only need a loan for a short period, say two or three months a payday loan may be a cheaper and more suitable alternative. But do make sure that whoever you obtain a loan from is registered with the Financial Conduct Authority and you can repay the loan with interest when the payments fall due.
Make Regular Deposits
Showing a regular income into your bank account and a healthy management of your funds by making sure you always have enough to cover your bills and expenses will help you to manage your money well. Equally as important, a good profile for you in the eyes of your bank, will stand you in good stead if you ever need to approach them for a loan or mortgage.
Peace of Mind
If managed correctly a bank account can make your life so much easier and, with your finances in check and under control, you can spend more time enjoying life and not worrying about counting the pennies or dreading the next bill.
*Figures quoted believed to be correct at date of publication.