Current Accounts

A current account is the everyday account most people in the UK use to receive money and pay it out. Wages, salaries, pensions and benefits are paid into it, and it is the account you use to spend in shops, withdraw cash, and set up Direct Debits and standing orders for bills¹. In the FCA's rulebook, a personal current account is defined as a payment account within the meaning of the Payment Accounts Regulations, other than a current account mortgage². In plain terms, it is the account the payments system is built around.

Most current accounts are free of a monthly fee for standard day-to-day use, though some charge for extra features, and using an overdraft costs money. Overdraft interest is often up to 40% APR charged daily³. Money held in the account is protected by the Financial Services Compensation Scheme up to £120,000 per eligible person, per authorised bank, building society or credit union⁴, and switching banks is backed by a guarantee that takes seven working days and refunds any interest or charges if anything goes wrong⁵.

What a current account is for

A current account is for managing money day to day: paying bills, receiving money such as a salary or benefits, and keeping track of spending⁷. MoneyHelper describes a bank or current account as the easiest way to access your payments⁸, and sets out what one usually lets you do: receive benefits and wages, spend in shops, withdraw cash at a cash machine, manage the account online or by mobile app, and set up Direct Debits and standing orders¹.

The regulatory definition matters because it decides which rules apply. The FCA's Banking Conduct of Business sourcebook defines a personal current account as an account, other than a current account mortgage, which is a payment account within the meaning of the Payment Accounts Regulations². The FCA notes that the definition of a current account is set out in section 131O of the Financial Services and Markets Act 2000⁹. Legislation passed in 2025 defines a "relevant account" as a personal account operating as a current account, savings account or investment account, but excludes credit card accounts and current account mortgages¹⁰. So a credit card is not a current account, and neither is an offset mortgage's current account element, even though both involve a bank.

Current accounts also sit at the centre of the access to cash rules. The FCA's access to cash regime covers cash deposit and withdrawal services for personal and business current accounts, including access to both notes and coins, and access that is free of charge for consumers with personal current accounts⁹. That is one reason the account type carries obligations other accounts do not.

Not everyone needs or can get a standard current account. MoneyHelper lists the alternatives for people who cannot: a credit union current account, run by not-for-profit organisations but sometimes with a monthly fee, and a prepaid card account, which usually does not require ID but cannot usually be used to set up payments¹¹. There is more on this in the guide to basic bank accounts, and the comparison of basic vs standard bank accounts.

Who can open a current account and what you need

You typically need to be aged 18 or over and a UK resident to open a standard current account³. Children and teenagers can get their own accounts, covered in the guide to children's and teenagers' bank accounts, and students and graduates have their own account types, covered in the guides to student bank accounts and graduate bank accounts.

For identity, most banks ask for a driving licence or passport, or a photo if you are applying online, often along with a selfie³. MoneyHelper says you will usually need ID to prove your identity, like a driving licence, passport, recent bills or official documents¹. Citizens Advice in Scotland describes the standard requirement as two separate documents: one proving who you are, for example a passport, and one proving where you live, for example a recent bill. Where someone cannot produce those, a letter from a responsible person such as a GP, teacher, social worker or probation officer may be accepted⁷.

The bank will usually run a credit check to see your credit history, including whether you have had problems paying money back³. This is why a poor credit rating or a low income can cause problems opening a standard current account or savings account⁷. People in that position, including people whose current account is overdrawn, may be able to open a basic bank account instead, which does not include an overdraft. The guides on what ID you need, opening an account without proof of address, opening one with no fixed address, opening one while bankrupt and accounts with no credit check cover these situations in detail.

One warning worth knowing early: if you have an overdraft or other debts on your current account and you open a basic bank account at the same bank, the bank may use the money in the new basic account to pay off the debts in the old overdrawn account. Citizens Advice Scotland suggests considering a different bank if you receive benefits, tax credits or a state pension⁷. This is the bank's right of set-off, explained in the guide to the right of set-off.

Opening a current account: online, by app, by phone or in a branch

Depending on the account you have chosen, you can usually apply online, using an app, over the phone, or in person in a branch³. Citizens Advice Scotland describes the usual process as filling in an application form in a branch, online, or sometimes over the phone, and providing proof of identity including your full name, date of birth and address⁷.

The steps in a typical application run as follows:

1. Check the account's eligibility criteria and what ID it asks for¹.
2. Fill in the application form, in whichever channel the bank offers⁷.
3. Provide proof of identity and, usually, proof of address³.
4. Pass the bank's credit check, where the account includes borrowing³.
5. Wait for the decision, then fund the account and set up your payments.

If an application is refused, the bank should tell you why, and there are routes to challenge it or to try a different account type. The guide to how to open a current account covers applying, documents and refusals, and the guide to what to do if you are refused a basic bank account covers the fallback option.

Fees and charges, including using your card abroad

Many standard current accounts have no monthly fee, but charges appear in specific situations. MoneyHelper lists the main ones: daily interest for using an overdraft, often up to 40% APR until it is paid back, and a fee if you do not have enough money to cover a payment, usually called an unpaid transaction fee³. There are usually fees or interest if you spend more than you have in your account, including where there is not enough to cover a Direct Debit or standing order¹.

Using your debit card abroad brings its own charges. MoneyHelper identifies two: a spending or cash machine charge, typically between £1 and £3 each time you use your card, except for euros in the EU, and a foreign exchange fee, often around 3% of the transaction amount³. The guide to debit cards and contactless payments covers card costs at home, and the section page on money abroad covers spending overseas.

Some accounts charge a monthly fee in return for extra features, such as insurance bundled with the account. These are known as packaged accounts, and whether the package is worth its fee depends on whether you would otherwise buy the extras separately. The guides to packaged bank accounts and packaged account vs separate insurance set out the comparison. Other accounts pay rewards or cashback, covered in the guide to reward and cashback current accounts, and some pay interest on the balance, covered in the guide to interest on current accounts and how it is taxed.

Banks must tell you about changes to charges in advance, and must give you an annual summary of the charges and interest you have paid. The guides on notice banks must give before changes and the annual summary of charges explain those rights, and the guide to reclaiming unfair bank charges covers what to do if you think a charge was wrong. The full list of costs is in the guide to current account fees and charges.

Overdrafts: borrowing through your current account

An overdraft is a form of borrowing attached to your current account. MoneyHelper describes it as a type of loan that often has interest, borrowed through your account¹². It lets you spend or withdraw more than the balance in your account, up to a limit the bank agrees with you. That agreed version is an arranged overdraft; going overdrawn without one, or beyond your limit, is an unarranged overdraft, and the two behave differently. The guide to arranged vs unarranged overdrafts sets them side by side.

An overdraft is not a safe way to borrow long term. MoneyHelper is explicit that overdrafts should only be used for emergencies or as a short-term option¹², and that one reason is that the facility is not guaranteed: the bank could take it away if it thinks you are over-using it and are in financial difficulty¹². nidirect, the Northern Ireland government information service, adds that with an unarranged overdraft you may have to pay a penalty charge and a high rate of interest, the bank may also charge for sending reminder letters and for Direct Debits or cheques put through the account, and it may freeze the account until the overdraft is paid off¹³.

The distinction between arranged and unarranged matters for charges. Since 2020, interest on all overdrafts is charged at a single annual interest rate (APR), making it easier to compare charges between accounts¹². The guide to the 2020 overdraft changes explains what changed and what happened to the old fee structures, and the guide to the maximum monthly charge for unarranged overdrafts covers the cap that still applies to some accounts.

Credit unions also offer current accounts with overdraft access, normally with daily interest up to 42.6%¹⁴. The guide to credit union current accounts is not in this section, but the section page on credit unions covers them, and the comparison of an overdraft vs a personal loan and of an overdraft vs a payday loan set out the alternatives.

How overdraft interest is charged and what it costs

Overdraft interest is charged daily on the money you borrow. MoneyHelper's guide to current accounts puts the typical rate at up to 40%¹⁵, and its overdraft guide states the same figure as an APR: often up to 40% annual percentage rate until the overdraft is paid back³. Interest is charged only on the overdraft money you use, not on the whole agreed limit¹³.

On top of interest, some overdrafts carry other costs. nidirect notes that banks also charge a monthly fee and a setting-up fee on some overdrafts, so it can be an expensive way to borrow money¹³. Where an account agreement allows you to overdraw without a pre-arranged overdraft, the regulations require information about the applicable charges to be included in the agreement, and the information on cost must be updated at least annually¹⁶.

The scale of overdraft use in the UK gives a sense of how common small overdrafts are. A Treasury committee memorandum recording an OFT estimate found that 40 per cent of accounts in overdraft were up to £100 in value, and about 32 per cent were between £100 and £500¹⁷. In other words, most overdraft borrowing is small and short lived, which is exactly the use case overdrafts are designed for.

The FCA also has rules on repeat overdraft use, designed to stop people cycling in and out of overdrafts without the bank engaging with them. The guide to overdraft repeat use: the FCA rules explains what banks must do, and the guide to when your bank must alert you about overdrafts covers the warning texts banks send before charges build up. The full mechanics of the cost are in the guide to how overdraft interest and charges work, and the main overdraft page is overdrafts explained.

Overdrafts are repayable on demand

An overdraft is repayable on demand. National Debtline states this plainly, and draws out the consequence: because the bank can ask for the money back at any time, money in an account that is overdrawn is no longer safe in the way a credit balance is¹⁸. Business Debtline gives the same warning for business account holders¹⁹.

This is the legal difference between an overdraft and a loan. A personal loan has a term, fixed instalments and a repayment schedule the lender cannot unilaterally tear up. An overdraft has none of that: it is a standing facility the bank can withdraw, and the debt can be called in. In practice banks rarely demand repayment without warning, and the FCA's repeat use rules require them to engage with customers showing signs of difficulty¹², but the legal position is what it is.

The practical implications run in two directions. First, an overdraft should not be treated as income or as a permanent extension of your budget, because it can be reduced or removed. The guide to whether your bank can reduce or remove your overdraft covers that scenario. Second, if you are in financial difficulty and relying on the overdraft, free debt advice is available before the position gets worse. National Debtline and Business Debtline are free, and the section page on debt lists the help that exists, including the options in the guide to struggling to repay an overdraft.

Getting out of your overdraft

Getting out of an overdraft means treating it as a debt to be repaid, not a feature of the account. Because interest is charged daily on the amount used¹³, the cost falls steadily as the balance falls, so even reducing the overdraft, not just clearing it, saves money.

If you are using your overdraft, you will have to pay it back before you can close your account, and you will lose access to statements once it is closed, so MoneyHelper advises getting copies first if you need them³. Switching while overdrawn is possible, but only if the new bank agrees an overdraft that covers what you owe; otherwise you must pay off the remainder before the switch can complete³. The guide to switching while overdrawn covers this route.

One option people in difficulty use is a separate account for day-to-day money. Debt charities advise this because if you use your overdraft, the bank is likely to start charging interest on your account¹⁹, and keeping income such as benefits in an account at a bank you do not owe money to protects it from set-off⁷. The guides to safe bank accounts and banking help after domestic abuse cover situations where separating money from a bank matters.

For the routes out of an overdraft, including repayment plans, hardship support and formal debt solutions, see the guide to struggling to repay an overdraft and the wider debt section.

Switching with the Current Account Switch Service: seven working days

The Current Account Switch Service (CASS) is the free, UK-wide service for moving your current account from one bank or building society to another. Over 50 UK banks and building societies have signed up to it²⁰, and the Payment Systems Regulator has designated the service, having assessed that it meets the relevant criteria²¹. It is operated by Bacs Payment Schemes Ltd²¹.

The process, as MoneyHelper sets it out, runs like this: you open the new account, provide your account and debit card numbers, and choose a date for the switch to complete. The service then transfers your Direct Debits and standing orders, moves your balance, redirects incoming payments such as benefits or salaries, and closes your old account³. It takes seven working days³, a timescale confirmed by the Consumer Council for Northern Ireland²², National Debtline¹⁸ and MoneyHelper's guide to choosing an account, which adds that you will be refunded any interest or charges if things go wrong⁵.

Your old account stays active and usable right up to and including day 6 of the switch²⁰. You cannot cancel a switch once the process has started, though if you selected a future switch date when opening the account you can cancel up to 7 days before that start date²⁰. The service is only available for current accounts: savings accounts cannot be switched through it²⁰. The guide to the Current Account Switch Service covers the process in full, the guide to how long a switch takes the timescale, and the guide to partial switching the option of moving payments without closing the old account.

Some banks offer cash incentives to switch, such as the £200 offers that banks were running in late 2026 with deadlines in December²⁴. How these offers work, and what to do if a promised bonus is not paid, is covered in the guides to how bank switching offers work and switch bonus not paid.

What the Switch Guarantee covers and what cannot be switched

The Switch Guarantee sits underneath every switch made through the service. National Debtline summarises it: banks guarantee that payments in and out of your new account are switched over in time so that you do not miss any regular bills and payments¹⁸. MoneyHelper adds the financial backstop: if anything goes wrong, you will be refunded any interest and charges on your old and new accounts³.

The service automatically redirects all incoming and outgoing payments to your new account²⁰, and any payments made to your previous account will be automatically directed to your new one²². The redirection lasts for 36 months after the switch, which catches late-arriving payments such as annual subscriptions. The guide to payments to your old account after switching covers what happens to stragglers, and the guide to what happens to Direct Debits when you switch the most common payment type.

What the service cannot do is worth knowing before you start:

• It cannot switch savings accounts; it is only available for current accounts²⁰.
• It cannot switch a joint account to a sole account. Joint accounts can be switched, as long as both parties agree and you are switching to another joint account²⁰. You can switch a sole account to a joint account elsewhere²⁵.
• It cannot carry over an overdraft automatically. You need to agree any overdraft facility you require with the new bank²⁰, and if the new overdraft does not cover what you owe, you must pay off the remainder separately before you can switch or close the old account³.
• It cannot move authorisations you have given to third party providers under open banking. Those need to be cancelled and re-authorised with your new account details²⁰. The guide to open banking explains what these are.

Joint accounts have their own rules beyond switching. Royal Bank of Scotland, for example, states that accounts must be opened in a sole name before being made joint, and that if one joint account holder passes away, it can change the joint account to a sole account²⁶. The guides to joint bank accounts, switching a joint account, joint vs sole accounts and closing a joint account cover the whole field, and the guide to freezing a joint account after a separation the hardest case.

Fraud, complaints and the Financial Ombudsman

Current accounts generate more complaints to the Financial Ombudsman Service than any other product, and they have done for years. In the year to March 2022, current accounts were the most complained-about product, with 24,335 new complaints²⁷. In 2023/24, over a fifth of current account complaints came from victims of fraud and scams²⁸. In 2025/26, fraud and scams accounted for 18,900 of the current account cases the ombudsman handled²⁹. In the first quarter of 2026/27 alone, the ombudsman received 8,900 new complaints about current accounts, up from 7,800 in April to June 2025, alongside 1,528 overdraft complaints of which 22% were upheld³⁰.

The ombudsman's banking and payment remit covers current accounts, savings accounts, Direct Debits, money transfers, electronic payment platforms, cheques and banker's drafts³¹. Its service is free to consumers.

The complaint route, as MoneyHelper sets it out, has three steps:

1. Contact the bank's customer services and give it a chance to put things right.
2. Make a formal complaint. The bank has eight weeks to investigate and give a final response.
3. If you still do not agree, or the eight weeks pass without a final response, take the complaint to the free Financial Ombudsman Service³.

On fraud specifically, MoneyHelper advises checking transactions and reporting any you do not recognise quickly, because you will usually get a refund if it is fraud³. The rules on refunds for unauthorised payments, and where they stop, are in the guide to unauthorised payments and your refund rights, and the wider picture, including scams where you authorised the payment yourself, is in the scams and fraud section.

On overdraft complaints, the ombudsman looks at whether the lending was affordable. When it investigates, it asks banks for current account statements for all accounts before the application to the present, and the dates any reviews were, or at least should have been, carried out³². That is the framework behind complaints that an overdraft was unaffordable, covered in the guide to struggling to repay an overdraft.

FSCS protection: up to £120,000 per person

Money in a current account with a UK-authorised bank, building society or credit union is protected by the Financial Services Compensation Scheme. FSCS protects eligible deposits from the first pound up to £120,000 per person, per authorised firm³³. The limit applies automatically: you are compensated up to £120,000 per eligible person, per bank, building society or credit union, without needing to apply⁴.

The limit is per person, per authorised firm, and it counts across all the accounts you hold with that firm. FSCS protects each account holder, any number of them, up to £120,000 in total across all accounts held with that firm in their own name³⁴. For joint accounts, each eligible holder gets their own £120,000, so a joint account with two holders is protected up to £240,000⁶, and two account holders could deposit £240,000 safely²⁵. The Bank of England's explainer gives the same figure: a joint account with two holders would be protected up to £240,000⁶.

Two details catch people out. First, the limit is per authorised firm, not per brand. If you have an individual account and a joint account within the same banking group, the £120,000 compensation limit applies across all these accounts, not to each separate account⁴. Second, business accounts can count separately: if your business is a separate legal entity, such as a limited company or LLP, you could claim up to £120,000 for each account, so a small business account and a personal account with the same bank each get their own limit³⁵.

For large sums, such as the proceeds of a house sale, protection above £120,000 may be available for a limited period. FSCS's guidance on temporary high balances states that eligible deposits categorised as temporary high balances are protected above £120,000 for six months after the amount has been credited, or from the moment the deposits become legally transferable³³. The press release announcing the change confirms FSCS now protects eligible deposits from the first pound up to £120,000 per person, per authorised firm³³. If a sum will sit in your account for longer than that, the protection stops at £120,000, and the guide to FSCS protection covers the detail.

If a bank fails, FSCS is triggered, typically when the firm is placed into an insolvency process such as administration or liquidation⁶. In most cases, for deposits, FSCS aims to pay compensation within seven days of the failure³⁶, and account holders normally get their money back within seven days, though complex claims may take longer⁶. FSCS is funded by a levy on the authorised firms whose customers it protects⁶, so the service is free to consumers. You can check whether your money is protected using FSCS's own protection checker⁴, and the FSCS Protected badge signals deposit protection up to £120,000 per eligible person, per firm³⁷. FSCS covers only firms authorised by the Financial Conduct Authority or the Prudential Regulation Authority to do business in the UK³⁶, which is why the guide to digital and app-only banks distinguishes banks from e-money institutions, whose protection works differently.

Who provides current accounts in the UK

Current accounts are provided by high street banks, building societies, digital banks and credit unions. Over 50 UK banks and building societies have signed up to the Current Account Switch Service²⁰, which gives a sense of how many brands compete for current account customers. The directory of banks and building societies lists the providers, and the guide to banks and building societies explains the difference between the two, as does the comparison of a building society vs a bank.

Credit unions, which are member-owned financial cooperatives, also offer current accounts, sometimes with a monthly fee and with overdraft access normally at daily interest up to 42.6%¹⁴. FSCS protects money held with a failed credit union up to the same £120,000 per person limit, and in most cases returns the money within seven working days of the failure³⁸. The credit unions section covers them fully.

Beyond the mainstream, there are specialist and niche providers. The guide to ethical and community banks covers providers chosen for their lending policies, the guide to Islamic and sharia-compliant banking covers accounts structured without interest, the guide to private banks covers banking for wealthier clients, and the guide to supermarket and retailer banks covers what happened to Tesco Bank and M&S Bank. Northern Ireland has its own banking landscape, covered in the guide to current accounts in Northern Ireland.

Choosing between them comes down to how you bank. The guide to how to choose the right bank account is not in this list, but MoneyHelper's advice on choosing notes that an overdraft is a form of debt with expensive daily interest, so it should only be used for emergencies or as a short-term option⁵, and that how you access your money, by app, online, by phone or in a branch, is a practical question worth answering before you switch. The guides to mobile banking apps and online banking, online vs branch banking, access to cash and banking at the Post Office cover the options, and the guides to bank branch closures and how much notice a bank must give before closing a branch what is happening to the branch network.