Money and Budgeting

This guide to choosing the right account is for you if you are trying to decide what type of account best fits your needs and or you want to know which features of an account you should compare.

Step by step guide to opening a bank account.


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Step by step guide to opening a bank account.

Step 1 – Decide how you want to deal with your bank

Do you like dealing with a person in a branch or would you prefer the convenience of telephone or Internet banking?

  • Not all banks provide phone, Internet, mobile banking, postal and branch services so make sure you will be able to bank how you want to.
  • If you like going into a branch, choosing a bank you can easily get to will be the most important factor.
  • Fees can vary a lot between banks and between accounts, with one of the highest fees being charged for going over your agreed overdraft limit.
  • If you regularly spend more than you have in your account, choose one which will give you a overdraft up to an agreed limit without charging fees and/ or with a low interest rate.

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Step 2 – Know what features to compare

Fees, charges and overdraft costs

  • Fees can vary a lot between banks and between accounts, with one of the highest fees being charged for going over your agreed overdraft limit.
  • If you regularly spend more than you have in your account, choose one which will give you a overdraft up to an agreed limit without charging fees and/ or with a low interest rate.

Interest rates on credit balances

Most current accounts do not pay interest. For those that do, the rate is low (usually less than 1%), so you’re unlikely to earn enough to make it an important factor when choosing an account.

Incentives

Many banks offer deals to attract new customers, but be sure to check if there are strings attached. Look beyond any short-term offer and make sure that, when it ends, the account will still be the best for you. Deals include:

  • a cash incentive
  • higher interest for a period
  • a monthly credit of £5
  • Most banks will offer a specific student account usually with an interest-free overdraft up to an agreed amount.
  • Banks often also offer attractive accounts to graduates to attempt to secure them as long-term customers.

Bank accounts for students and graduates

  • Most banks will offer a specific student account usually with an interest-free overdraft up to an agreed amount.
  • Banks often also offer attractive accounts to graduates to attempt to secure them as long-term customers.

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Step 3 – Compare different accounts using comparison sites

Internet comparison sites make shopping around for a new account much easier, but it’s always best to use more than one comparison site to get a picture of all that’s on offer.

For further information go to https://www.moneyadviceservice.org.uk/en/articles/how-to-open-switch-or-close-your-bank-account

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Budgeting

  • List all the money that you have coming in for example, wages, allowances benefits etc
  • Now list what you spend your money on
  • Think about necessities and think about what are luxuries
  • Make sure you set aside enough more for the things you need rather than the things you don’t.
  • Think about how much you can save it is a good idea to have money to fall back on.

 

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