Having loads of bank accounts to choose from can be just as frustrating as it is liberating.
To help you navigate the dizzying amount of accounts on offer we put together this video
guide on how to choose the best bank accounts.
Consider the following five questions and you’ll be well on your way to finding the
best bank account for you.
What do I need from my bank?
Different bank accounts serve different purposes, so working out how you want to use yours will
help direct you towards the right account.
For example, if you want a basic account for everyday spending and making ATM withdrawals,
a current account might suit you.
If you want to create a savings pot with restricted access, try a fixed-rate savings account.
There are bank accounts that come with additional perks and rewards or interest rates.
And specific accounts for business banking, students and children - so it’s really worth
figuring out what your needs are to get the most bang from your bank account.
What do I value in a bank?
Once you’ve figured out what you need your bank account for, it’s time to get your
diva on and think about any of these specifics that you simply can’t live without.
If you’re a real people person and like conducting your business in-branch, go for
a bank that has physical branches near convenient locations for you, like your home or workplace.
If you’re looking to save or set up an overdraft, it’s worth comparing accounts with the most
competitive interest rates.
Do you want 24-hours customer service or access to additional financial products like credit
cards, travel insurance or mortgages?
Figuring out what you can’t live without will help narrow down your search.
What are the main features to compare?
Most people won’t get excited about sifting through all the small print, yet still we
want the best bank account.
If you’re short for time, here are the four key features you’ll want to consider when
comparing accounts side-by-side.
1.
Interest rates.
This one is important.
Getting the highest interest rate will mean your money will work harder for you.
2.
Small fees (or preferably none).
Most banks don’t charge a fee for maintaining accounts.
But if they do, weigh up whether what you’re getting is worth as much or more than the
fee.
3.
Access to your cash.
This will depend a lot on your preferences and personal savings goals.
Do you want instant access to your funds or would some restrictions help you to save.
4.
Rewards.
If you’re in the market for some extra benefits like shopping vouchers or exclusive rates
take a look at accounts that offer special rewards.
Digital vs traditional banks
Digital challenger banks like Monzo or Starling are all the rage at the moment, but ask yourself:
are they really the right option for you?
Traditional banks tend to offer more variety in terms of account options, and allow you
to do your banking with an actual human being in a physical branch.
Most traditional banks now offer some form of online or mobile banking, but their functionality
is often limited when compared to the tons of techy features you get with most digital
challengers.
Mobile-only banking apps are designed to help you manage your entire finances through your
phone.
In a few taps you can set-up a monthly budget, set weekly savings goals and block or cancel
your card if it gets lost or stolen.
Plus with instant, categorised spending notifications, these apps give you much more detailed insights
into how much you’re spending and on what.
Most digital challenger banks don’t have brick-and-mortar branches, but typically customer
service support will be available in-app or over the phone 24/7.
Whether one is better than the other really just depends on your personal circumstances
and your answers to the first two questions.
Which banks are the safest?
Safety is a common concern especially as we see more online and digital banking.
In theory, what counts as safe is relative to your personal needs, circumstances and
specific provider.
Many digital challengers are now fully-licensed banks which means, just like your traditional
banks, funds up to £85,000 are protected by the Financial Services Compensation Scheme.
In cases where your provider is not a fully-licensed bank it should at least be regulated by the
Financial Conduct Authority, and your funds kept separate so they can’t be invested
or used to pay off any debts should the company fold.
In terms of account security, look for accounts with passcode or ID protection, “magic links”
sent to your email and instant notifications, so you’ll automatically know if something
dodgy is happening on your account.
What next?
For more information the best bank accounts and to start comparing the right options for
you, head to finder.com - links are tagged in the description below.
Hit the subscribe button here or stay tuned for our next video coming up.