Banking
From Personal Finance
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[edit] Basic Bank Accounts
Basic bank accounts were set up through a Government scheme to help poorer families and those who have problems opening a normal bank account. The scheme is aimed at giving everyone access to banking facilities
Basic bank accounts allow you to pay in your wages, benefits, tax credits and state pension. They give you a cash card to withdraw your money and some offer standing orders and direct debits. Unlike normal bank accounts, they do not give you a cheque book or overdraft facility.
Basic bank accounts also appeal to people who are worried about over spending, as they do not give you an overdraft. Therefore, you can only spend what is available in your account. However, you still need to keep an eye on your account balance if you have standing orders or direct debits set up. If there is not enough money in your account to pay these, they will be rejected and you will be charged.
[edit] Current Accounts
Current accounts are traditionally used for day-to-day banking activities and as such often pay rates of interest a lot poorer than savings accounts. Credit interest on these accounts can be as low as 0.1%. however, some providers are now offering current accounts that pay rates of interest competitive with some savings accounts.
Current accounts can often be operated via various means including via the internet, branch, telephone, post, WAP phone and digital TV. Newer forms of access such as internet and TV allow you to check your balances, review transactions, transfer money and set up standing orders. Form of access can be particularly important of your bank does not have a branch close to you or if you do not have the time to visit one.
The facilities provided by current accounts also vary. These include cheque books, cheque guarantee cards, debit cards and overdrafts. Account sweeping is also available on some accounts, which means there can be an automatic transfer of funds to or from a chosen savings account. Most current accounts allow you to set up direct debits and standing orders for regular automatic payments.
Some current accounts require minimum funding per month or that your monthly earnings are paid into them. Some accounts, usually termed ‘packaged accounts’, charge a monthly fee. These accounts come with additional features such as free travel insurance and preferential overdraft rates.
[edit] Graduate Bank Accounts
Most major banks offer graduate bank accounts and other financial services specifically tailored for graduates. These accounts can help you to manage your money and student debt effectively. You have to apply for these accounts within so many years of graduating.
Graduate accounts offer a range of different facilities such as preferential overdraft and loans rates and commission free currency and travellers’ cheques.
Most accounts also offer a Graduate Manager who will help you to sort your finances and offer financial advice. Some banks also offer specific mortgage for graduates if you hold a graduate or current account with them.
Graduate bank accounts are traditionally used for day-to-day banking activities and as such often pay rates of interest a lot poorer than savings accounts.
These accounts can often be operated by various means including the internet, branch, telephone, post, WAP phone and digital TV. Newer forms of access such as internet and TV allow you to check your balances, review transactions, transfer money and set up standing orders. Form of access can be particularly important if your bank does not have a branch close to you or if you do not have the time to visit one.
Graduate bank accounts offer overdrafts and limits on these will vary between banks. Many banks offer different limits on these overdrafts over the successive years. If you have arranged for an overdraft facility on your account, you will be charged an authorised overdraft rate - the rate of interest that you will pay on your overdrawn balance if you remain within your authorised limit.
If you have not arranged an overdraft facility or exceed your authorised limit, you will be charged interest at the unauthorised overdraft rate. This rate will be much higher than the authorised rate. You may also be charged a fee for being overdrawn. Any fee charged would depend on whether the overdraft is authorised or unauthorised.
[edit] Student Accounts
Student accounts will undoubtably be at top of your priority list if you’re off to university or college this year, second only perhaps to selecting the place where you'd like to study. Banks know this only too well and will be ready to bombard you with their student account offers.
Even before the ink has dried on your A-Level certificates, expect to be targeted by the big banks to take out one of their student accounts. Is it any wonder? The future earnings and savings potential that graduates have means that you’re hot property and they’ll be fighting for your custom.
