Different types of accounts come with different features. Here is a summary of what features different types of accounts may have and a simple explanation of common terms users may come across. Please note, this is a general description and some accounts may have specific features dependent on their provider, e.g. their bank.
A type of account that is used every day. It usually comes with a bank card. People usually have their salary paid into this type of accounts. Bills and regular payments are normally made from this type of account in the form of bank transfers, Direct Debits, Standing Orders etc. It has the functionality of making one-off payments to another Current account. This could be a personal account, a business account or a company.
As this account comes with a bank card, users are able to withdraw cash from a Current account at an ATM machine or, where available, over the counter.
If eligible, this account can be used with an Overdraft facility.
|Savings Account||A Savings Account differs from a Current Account in terms of the access you have to this type of account. It earns a substantially higher interest in comparison to a Current account, however, users have limited access to this type of account. There are different types of Savings accounts that users can choose where they may define the type of access they would like. As a general rule, the more limited the access is to the account, the more interest it earns. Normally, there are restrictions for outward payments from this account. Users nominate an account where they would like payments to be made into, for example, monthly interest earned on the account.|
|ISA||An ISA stands for Individual Savings Account. It differs from other types of Savings account as the interest earned on the balance in an ISA account is tax-free. This amount is limited to a certain amount every tax year, known as the 'ISA allowance'. Because of this government initiatives, users are only able to hold one active ISA account each tax year.|
|A Business account works just like a Personal Current account in terms of functionalities. It differs from a personal account in terms of ownership, as all transactions will relate to the Business rather than an individual. Having a Business Account benefits business owners/their accountants to track business expenditure and cash flow, which helps greatly with accounting audit and account management.|
A Credit Card is a bank card that allows you to purchase things just like a Debit Card from a Current account. The difference is that you are offered a credit limit, where you are offered a balance in the form of credit (like a small loan). Once you have purchased an item, the amount of this purchase is what you owe the Credit Card provider. Depending on when you pay this balance, this may incur interest, which is usually added on the statement date every month.
A lot of providers give their users offers, such as interest-free or low-interest purchase offers. Here, the user does not pay interest on their balance for a set period of time as long as they meet their minimum payment requirement. Another offer may be interest-free or low-interest balance transfer offers. Here, users may be able to transfer balances from different credit card providers in order to benefit from cheaper or free interest on their credit card balance. There is also an option known as money transfer where a user may be able to transfer a credit card balance into a Debit account, e.g. a Current Account, which they can then use in the form of cash. For more information, please contact your credit card provider as offers and Terms and Conditions vary dependent on each provider.
|Deposit Account||A Deposit Account in the UK usually relates to a type of account where a lump sum of money is deposited for a fixed period of time, where the user is unable to access it. During this time the lump sum earns interest, dependant on the type of account, this can be paid into a nominated account. Please ask your provider for specific details about this type of account.|