What Current Accounts Offer

The services associated with current accounts are:

- cheque book: this is the most commonly used alternative to paying for items by cash. Some of the building society accounts and a few bank accounts don't include a cheque book - a serious drawback for most people

- cheque guarantee card: this ensures that your bank will pay out on a cheque up to a given limit. In most cases, the limit is £100, though it's £400 with some accounts, and some banks will issue to particular customers cards with a limit up to £450. The >- cash card: you can use this in 'hole in the wall' machines (Automated Teller Machines - ATMs) to withdraw cash from your account. Many ATMs also let you check your balance, order statements or cheque books and sometimes give you mini-statements and let>- standing orders and direct debits: these are methods of making regular payments, such as paying insurance premiums, or rent or mortgage payments, or transferring part of your salary to a savings account

- debit card: a plastic card which you use instead of cheques and which automatically debits your current account when you use it to buy goods and services

- home banking: the big banks (and a few building societies) now offer a service which lets you conduct much of your banking from home using either just your phone, or your phone in conjunction with a home computer or Skybox receiver and TV

WARNING Banking from home is clearly convenient, but unless you already have the necessary equipment it can be expensive. The cheapest systems use your phone plus a tone pad - but you won't need the tone pad if your phone is one which can use tone dialling. For the systems which use Sky TV, you'll need Sky TV equipment or a computer. Check what the running costs will be as well, before committing yourself to this type of banking.

- overdraft facility: you may be allowed to have access to more money than is in your account - up to a limit

- interest paid on your balance while you're in credit: this is not a feature of traditional bank accounts but is standard with building society accounts and newer accounts from big banks

WARNING Some 'high interest' accounts restrict your banking in various ways - for example, there may be no cheque card or cash card, or you may need to keep a minimum balance of £1000, say, or withdrawals may have to be a minimum size such as £400 or £400. For most people, these restrictions mean that such accounts are not suitable for their day-to-day finances.

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Day-to-day Finances

Bankers are just like anybody else, except richer. Mervyn King

Current accounts are central to managing your money on a day-to-day basis. They were once the exclusive preserve of the banks. But since the Building Societies Act 1986 opened the way for building societies to offer many new services, the distinction between banks and building societies has become increasingly blurred, especially in the area of personal banking. What you might expect from a current account is also changing: standard services include not just the usual cheque book, cash card, standing order and direct debit. There... see: Day-to-day Finances

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