Young Wrexham

Types of Accounts

Banks and Building Societies offer several different types of accounts for you to use, depending on what you are planning to do with your money.

Accounts are there to help you control your money and earn extra money from it in the form of interest given to you by the bank or building society. Talk to your local bank or building society about the accounts they can offer you - and don't be afraid to shop around to find the one that suits you best.

Basic Bank Account

• These accounts let you pay in money, set up standing orders and direct debits and get out money using a cash card at a cash machine. See Direct Debit and Standing Orders
• You cannot go overdrawn on a basic account, which means you can only take out what money you have available personally. See Overdraft
• This is a good way to start controlling your money and you can have as many basic accounts as you like, as long as they are at different banks. They are usually open to most people, even if they have credit problems

Current Accounts

• A current account is a bank or building society account for your day-to-day business or transactions and is similar to a basic account
• You can have more than one current account with different banks or building societies
• A current account allows you to get out money with a cheque book or cash card and pay standing orders and direct debits. See Direct Debit and Standing Orders, Debit, Credit and Store Cards and Cheque Books
• You can withdraw money without warning from cash machines or cheques
• You might also be given a debit card, which allows you to pay for items in shops and restaurants for example. Debit, Credit and Store Cards
• Some current accounts may also give you an overdraft. This is a type of credit that allows you to withdraw extra funds from your account, when you have no money left. You will usually be charged for this

Student Current Accounts

• Some banks and building societies will offer special student current accounts for people over 18 studying in higher education
• These accounts are designed to help you manage your finances during your studies and give you certain benefits over other current account holders
• Most student accounts offer free banking and interest-free overdraft facilities to a certain limit. Many also have student advisory services to help you manage your accounts. See Overdraft
• Many banks and building societies offer an incentive to sign up to their student account, including free cash payments, rail cards, retail or book discounts, tickets or CDs. This varies depending on where you apply. Look into the best option for you. For example, if you live away from your parents, a rail card might be useful. However, if you live close by, you might prefer to have a cash payment or a free gift
• You also need to research what interest-free overdraft facilities other banks and building societies are offering to get the best deal for you
• You will need proof of your student status from your university to apply
• Remember, the overdraft is not free of charge forever and you will have to repay it after you have finished studying so try and stay in control of it

Graduate Accounts

• Most student current accounts will be transferred into graduate accounts once you have finished university
• These accounts aim to help graduates with their money and debts for up to three years after graduating
• They will often continue to offer staggered interest-free overdrafts for three years, reducing the interest-free level each year to help to clear the debt slowly
• Some also offer additional benefits like money-off vouchers or reduced rate loans or mortgages. Check with your bank or building society for its offers or visit the Debt section for more details

Post Office Card Account

• These accounts can only be used to collect benefits, tax credits and state pensions. See the Benefits section for details of these benefits
• You cannot pay any other money in and it can only be taken out at a Post Office counter
• This account is available to almost everyone. Ask at your local Post Office for details

Savings Accounts

• Savings account are designed to help you save your money and earn interest on your cash
• There are several types of savings accounts, depending on how much money you want to save, how long you want to save your money for and whether you want to pay tax or not

Instant Access Savings Account

• This account allows you to save your money, earn interest and have immediate access to your cash as soon as you need it
• Many people use instant access savings account as emergency funds to meet any unexpected costs straight away
• You will have a cash card with your account so you can access your money 24 hours a day from any cash machine
• Please remember, there might be a limit to how much you can take out in one day from a cash machine so plan for this in your finances. Your branch will allow you to withdraw all of your funds in one go if necessary
• The instant access savings account will offer a lower interest rate than other savings accounts
• Research to find the account offering the highest rate available but check that 'instant access' really means just that. Some Internet banks need a few days to get your funds to you and this will be no help during an emergency

Notice Savings Accounts

• These accounts tend to offer a better interest rate because your money is tied up and you cannot access it straight away
• You will usually have to give the back warning on when you will be taking out your money. How much notice you have to give them will vary

Cash ISAs (Individual Savings Accounts)

• These savings accounts allow you to save and earn tax-free
• Most cash ISAs offer a better deal than most notice savings accounts
• Some cash ISAs require 90 days notice to access your money. If you think you'll need your money in a hurry, opt for the Instant Access Cash ISA which allows you to withdraw your money as soon as you need it
• There may be some restriction on how many withdrawals you can make each year
• Cash ISAs are more suitable for regular, monthly savings
• Check with your bank or building society for what is on offer to you

How do I open an account?

If you want to open an account, do your research first. Find out what the banks and building societies are offering and choose the right one for you. Compare interest-rates and incentives.

You can then call your chosen bank or building society by telephone or call into their local branch. Some banks and building societies will also let you apply online.

You will need to take certain forms of identification with you in order to set up the account. This is to prove you are who you say you are. They will usually request your passport and proof of where you live but check with your branch before arriving so you can ensure you have the right documents ready.

If you want help choosing the right account, talk to the Citizens Advice Bureau, who can advise you on all your options. Beware of banks and building societies selling you accounts that aren't right for you.

Remember, your account is confidential and should only be used by you (unless you have set up a joint account). Never give anyone your PIN or your card under any circumstance - even if you think they can be trusted.