Types of current account

A current account is the account you use for everyday money: receiving your salary, pension or benefits, paying bills, spending with a debit card and withdrawing cash. In the regulator's terms, a personal current account is a payment account, other than a current account mortgage, within the meaning of the Payment Accounts Regulations¹. In practice it is the account your income lands in and your bills go out of, and most people can use it to receive benefits and wages, spend in shops, withdraw cash, manage money online or by mobile app, and set up Direct Debits and standing orders².

Current accounts are different from savings accounts, which are for putting money away for the future, for emergencies or for expensive purchases³. A current account usually comes with a debit card for shops and cash machines, possibly an overdraft and other credit, and the ability to make regular payments automatically³. Money held in current, saving and fixed-term deposit accounts with a licensed bank or building society is protected by the FSCS deposit protection scheme⁴.

What a current account is for

The core job of a current account is managing money day to day: paying bills, receiving money such as salary or benefits, and keeping track of spending³. Everything else a bank offers is built around that. A current account normally comes with a cheque book to take money out, possibly a debit card for shops and cash machines, possibly an overdraft and other credit, and Direct Debits and standing orders for regular payments³.

The FCA's rulebook gives the term a precise edge. A personal current account means an account, other than a current account mortgage, which is a payment account within the meaning of the Payment Accounts Regulations¹. The definition matters because it decides which rules a bank must follow for that account, from how it communicates with you to how it handles complaints. The same definition appears across the FCA's conduct rules for banks⁷.

A current account is not the same as a savings account. Savings accounts are for money you would like to save for the future, for emergencies or to buy expensive things³, and credit union savings accounts either pay interest or a share of any profits⁸. Many people hold both: the current account for the flow of daily money, and a savings account for the money that should stay put. Legislation also recognises the category, defining a "relevant account" as a personal account operating as a current account, savings account or investment account, including one operating by reference to electronic money⁹.

If you receive Universal Credit, a bank or building society account, also called a current account, is described as the easiest way to access your payments². The same account can receive wages, a pension and benefits, which is why most people organise their money around one. For a fuller picture of how the account works day to day, see how a current account works, and for the difference in detail, current account vs savings account.

Standard, basic, joint and sole accounts

Most current accounts fall into a few broad types, and the differences between them change what you can do with the account.

A standard account is the ordinary current account a bank or building society offers: income in, bills out, debit card, and usually an overdraft facility subject to a credit check. Providers offer these in single or joint form¹⁰.

A basic bank account is a simplified form of current account⁷. Basic bank accounts let you pay wages, salary, benefits and tax credits directly into the account, pay in cheques and cash, pay bills by Direct Debit and withdraw money from cash machines³. They are designed for people who might not qualify for a standard account, for example because of a poor credit history, and one route in can be applying for the bank's other accounts first, such as their standard current account¹¹. As an example of what they include, Barclays' Basic Current Account allows customers to pay in income, make payments, withdraw cash and set up regular payments such as Direct Debits and standing orders, managed through the app, online, in branch or by phone; it does not include an overdraft or cheque book, but customers can receive text alerts and regular statements¹². Alternatives to a basic bank account include a credit union current account, run by not-for-profit organisations, though you might pay a monthly fee for one, and a prepaid card account, which usually does not require ID but generally cannot set up payments¹¹. See basic bank accounts explained and basic vs standard bank accounts.

A joint account is opened jointly with other people, for example to manage household bills or with a spouse or civil partner³. A joint account normally allows two or more people to receive payments, pay by debit card, transfer money and manage the account, depending on the bank¹³. The Current Account Switch Service works for joint accounts, provided you are switching to another joint account and all account holders agree; you can also switch a sole account to a joint account elsewhere¹³. Joint accounts carry particular risks if a relationship breaks down, covered in freezing a joint account after a separation.

A sole account is simply one held in your own name only. Most people hold a sole account for their own money and, if they share household costs, a joint account alongside it. There is more on the comparison in joint vs sole bank accounts.

More than one account, and who can open one

Provided you meet the eligibility criteria, there is no limit to the number of current accounts you can open⁵. People commonly hold two or more: one for bills, one for spending, or a separate account for a specific purpose. The things to watch are the eligibility rules each provider sets, and the effect on your credit file, covered in how current accounts affect your credit file and can you have more than one current account?.

Who can open one depends on the provider's checks, and on your immigration status. You can usually open a bank account if you have leave to remain or a valid visa¹⁴. Some online banks offer a current account where you do not need proof of address, which matters if you have recently arrived in the UK or have no fixed address¹⁴. Banks have also joined a scheme to help homeless people open bank accounts, which is one route in for people without a stable address¹². If you are struggling to open an account, see opening a bank account with no fixed address and what ID you need to open a bank account.

Not every account that receives regular payments is a current account. Pension legislation, for example, defines its own categories of pension account, including an active member's pension account, a deferred member's pension account, a retirement pension account and a pension credit account, among others¹⁵. These are not current accounts and do not work like them. Separately, around two million people have faced a state pension payment headache because of how their payments are handled, which is a reminder that where a recurring payment lands is a practical choice worth getting right¹⁶.

Where you can open a current account

Current accounts are offered by banks, building societies and credit unions. Credit unions offer current accounts alongside savings accounts and loans, and a credit union current account can be a genuine alternative to a bank account, though it may carry a monthly fee⁸. See credit unions: a complete guide and banks and building societies: a complete guide.

Depending on the account you have chosen, you can usually apply online, using an app, over the phone or in person¹⁷. To open a bank account you normally fill in an application form in a branch, online, or sometimes over the phone, and provide proof of identity including your full name, date of birth and address³. For basic bank accounts, you can usually apply online, by phone or in a branch, though you will often need to apply for one of the bank's other accounts first, such as their standard current account¹¹. The step-by-step process is covered in how to open a current account.

The Post Office is a special case. It announced its intention to enter the personal current account market and subsequently launched three types of account: a "free in credit" standard account, a packaged account and a control account¹⁸. The Post Office's own account is operated through the Bank of Ireland¹⁶. Separately from offering its own accounts, the Post Office acts as a counter for other banks: some banks will let you cash a current account personal cheque or use your cash card at the Post Office, free of charge, so ask your local branch³. All basic bank accounts offer the facility to withdraw cash at a local Post Office²⁰, and credit union current accounts can be used at a local Post Office for both withdrawals and deposits²⁰. The old Post Office card account, used for benefits and pensions, has closed, and holders needed to move to a bank, building society or credit union account²¹. See banking at the Post Office and Post Office banking vs banking hubs.

Account alerts and what banks send you

Banks send several kinds of alert, and they are worth turning on because they are one of the quickest ways to spot a payment you did not make. Bank mobile apps typically let you opt in to alerts for card spending and bank transfers, and you can check the app settings for these options²². Text alerts are also common: Barclays' Basic Current Account, for instance, includes text alerts and regular statements¹². Regular statements themselves are part of the service, and checking transactions and reporting any you do not recognise quickly matters, because you will usually get a refund if it is fraud¹⁷.

Alerts sit alongside other routine information a bank sends. Guidance on avoiding scams covers what a scam is, the different types of scams, ways to avoid being scammed, what to do if you have been scammed and useful contact information²³. For overdrafts specifically, there are rules on when your bank must alert you, covered in when your bank must alert you about overdrafts.

What alerts cannot do is stop you making a payment you have chosen to make. They tell you what has happened; the protections around payments you are tricked into making are separate, and are covered in the rest of this page. For the mechanics of app and online banking, see mobile banking apps and online banking.

Scam protection on current accounts

Current accounts are the main target for scams, because that is where the money is. The protections come in layers, and it helps to know which layer does what.

The first layer is what you control. Guidance from the Take Five campaign advises turning on 2-step verification to add an extra layer of security to any accounts that hold your personal or financial information²⁴. Its app guide sets out the protections available for payments from personal bank accounts, including those made by micro-enterprises and certain charities²⁵. Checking transactions regularly and reporting anything unfamiliar quickly means you will usually get a refund where it is fraud¹⁷.

The second layer is what the payment system does. Confirmation of Payee is a name-checking service that applies to accounts which allow consumers to transfer funds in and out, such as current accounts and e-money accounts; mortgage and credit card accounts are excluded²⁶. It is designed to catch payments sent to the wrong, or a suspiciously different, name. See Confirmation of Payee explained.

The third layer is knowing the tricks. A common scam involves a fraudster pretending to be from your bank, phoning to say you have been a victim of fraud, and asking for personal and financial information or asking you to transfer funds into a "safe account"²⁷. No genuine bank asks you to move money to a safe account. For people who are concerned about being scammed, there are options such as prepaid debit cards that can help, according to the learning disability charity Mencap²⁸. If something has already gone wrong, the Financial Ombudsman Service can look at complaints about banking and payment services, including current accounts, savings accounts, Direct Debits, money transfers, electronic payment platforms, cheques and banker's drafts²⁹. See scams and fraud: a complete guide and unauthorised payments from your bank account.

APP scam refunds: what the reimbursement rules cover

An authorised push payment (APP) scam happens when you send money to a fraudster from your bank account, either through trickery, because they are posing as someone else, or for goods or services that never arrive³⁰. Since 7 October 2024 there has been a mandatory reimbursement requirement for these scams, and it is the strongest protection a current account holder has against being tricked into paying.

The Payment Systems Regulator's consolidated policy statement, PS25/5, brings together its previous publications on the reimbursement requirement into a single point of reference, including summaries of the most frequently asked questions and the requirements for reimbursement of APP fraud committed over the CHAPS payment system⁶. The requirement applies to APP scam payments executed by individuals, micro-enterprises and charities⁶.

The checks that decide whether a scammed payment must be reimbursed.

The rules require reimbursement in all but exceptional cases, so more victims get their money back³⁴. All types of APP fraud are covered, such as impersonation or romance scams³⁵.

Who is covered, and what is not:

• Covered: payments from personal bank accounts, and payments made by micro-enterprises and certain charities²⁵; bank transfers to UK accounts³⁵; payments made using Faster Payments²⁵.
• Not covered: payments made using cash, a cheque, or a credit, debit or prepaid card; payments across other payment systems, for example card payments or cryptocurrency transfers; civil disputes; fraudulent claimants; payments to another account you control; unlawful payments; and payments to and from credit union, municipal bank or national savings bank accounts²⁵.

A bank could refuse a refund in certain circumstances, such as where you ignored warnings about scams when setting up and amending payees or before making a payment, did not take care to establish that the person you were sending money to was legitimate, were grossly negligent, or acted dishonestly when you reported the scam³⁰. Before the mandatory rules, a voluntary code applied, under which banks signed up to refund victims in these situations³⁰. If you have been scammed, the practical steps are in how to get your money back after a scam and what to do if you are the victim of a bank transfer APP scam.

Faster Payments and CHAPS: both are covered

The reimbursement rules were built for Faster Payments, the system behind most instant bank transfers in the UK, and were extended to CHAPS, the system used for large-value payments such as house purchases. Everyone making a payment via Faster Payments or CHAPS from one UK bank account to another is covered³⁷. The rules apply to payment service providers that offer Faster Payments, which is most UK banks, building societies and e-money firms, and also to firms making CHAPS payments³⁶.

The eligibility conditions are specific. You must have made a transfer as part of a scam on or after 7 October 2024, made the transfer to another UK account, and told the bank or payment service provider no more than 13 months after the last payment³². The rules cover most transfers between UK bank and other accounts³². Relevant accounts are accounts held in the UK which can send or receive payments using the Faster Payments Scheme, but they exclude accounts provided by credit unions, municipal banks and national savings banks³⁸. The requirement applies to all payment service providers participating in the Faster Payments Scheme and CHAPS, whether directly or indirectly, that offer relevant accounts⁶.

For how the payment systems themselves work, see bank transfers: Faster Payments, Bacs and CHAPS.