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 Unless
you want to keep all your money under your matress or under
a floor board the best place to have it stored is in a bank
account (obviously there are different types of bank accounts
which we will come onto) unless you live in a fortress that
is completely impenetrable and is unable to burn down or
anything, but I think we know that this is very unlikely...
Anyway,
bank accounts offer a safe and secure way for people to
store, save and access their money, on top of this the bank
usually pay you interest for having your money with them.
This is in effect their way of saying "thankyou"
as they use your money by investing in things such as the
stock markets. Different banks
offer you different levels or interest which is why it is
worth taking the time to have a look at what each bank account
offers you. It doesn't take long but for the sake of a bit
of your time you could be earning yourself a continuous
extra amount of money for very little work. You do the math's,
a bank pays you 0.10% on the money you have with them or
a bank offers you 4.10%, there is a considerable difference
in these rates and you would be earning 4% more with one
compared to the other!
So,
now you understand why it's a good idea to have a bank account
or bank accounts (to keep your money in a secure place)
and how it can be beneficial to have a bank account (because
you can make your money earn interest) the question is which
bank account should you get?
What
type of bank accounts?
If you didn't know there are different types of bank accounts,
you can have a current account
and a savings accounts.
A current account is in effect your "run of the mill
bog standard account" (in non technical terms anyway),
it's the account most people use to pay in and draw out
their money. This type of bank account offers quick access
to funds, and usually comes with a bank card where you are
able to withdraw money from a "hole in the wall".
Many also come with cheque books so you are able to pay
for things with cheque or with your bank debit card depending
on what you prefer. Also, you can with many banks arrange
an overdraft (basically this allows you to in effect "borrow"
money from the bank if you don't have enough in your bank
account), the banks can charge you for this, especially
if you don't arrange an overdraft and end up borrowing money
from them and these charges can be fairly high, upto £25
per day for 3 days in some cases! If however you have an
agreed overdraft limit with the bank you could well be permitted
to borrow with out incurring any charges, which I think
you'll agree is the best way to go about it?!
Pretty
obviously a "savings account"
is where you put your money that you want to save. They
usually offer a higher rate of interest compared to a current
account.
Well
the obvious answer right at this moment is by looking on
the internet (well you are using right now so it makes sense),
and this site is a good place to start. As with most companies
and banks being no exception you can check out what they
have to offer online (compare
banks), but also you can in many cases apply for bank
accounts online via their websites (isn't the Internet great!)
so you don't have to step out of the house or office to
go and speak to them at your nearest branch! Also, you have
probably heard about the great savings that you can make
online by doing your shopping well you can also get some
great offers by applying for a bank
account online, you can even get free money from some,
such as First Direct
and Lloyds TSB!
Another
way to get yourself a bank account is to go down to your
local high street and pop into the different branches that
are there, you can then compare what they have to offer,
and there is no harm in asking what incentives they have
for you for joining up with them either! Once you've visited
the banks on the high street you can make your mind up and
go in and join up there and then or make an appointment
and do it at a convenient time for you. If you want time
to read all the information you have got from the different
banks you could go home and then phone up your local branch
when you have made your decision and make an appointment
(you will probably be required to take some form of ID with
your picture on, such as a driving license or passport,
also a utility bill or bank statement from another bank
to prove your address. Make sure you ask if they don't tell
you what you are required to take as you don't want to waste
your journey).
If
you already have a bank account and are opening another
bank account and want to transfer direct debits and payments
that you have set up to go in and out that in many cases
the new bank you are joining will arrange off of this for
you so you don't have to worry about doing it, this can
really save you the time and effort of having to sort out
all the standing orders, direct debits etc!
Now,
lets say that you have decided which bank account you want
and have filled in the forms and got approved, then next
you will have to wait for your bank card/cheque book/pass
code/online banking
details to arrive with you. These arrive separately and
not all together for security purposes, that way if your
bank card goes missing in the post that if anyone "finds"
your card that they don't have your pass number to use it
(even if the "finder" did manage to use it the
bank is insured and your money should be protected from
any fraudulent activity, so fear not!)
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