Things to be Aware of before Opening a Bank Account

If you are planning on opening a bank account then there are a few things worth noting beforehand. Bank accounts can come in various shapes and sizes, and so can have a few terms and conditions. As such, these are a few things that should be checked before opening an account.

To begin with, the type of bank account that is being opened. There are actually a few types of bank accounts, namely current or saving accounts, and other tax-free alternatives such as Isa accounts. Overall, current accounts are the most accessible type of bank account, while savings accounts are more suitable for larger deposits and savings.

Regardless of the type of account that is being opened, the quoted interest rate is always worth noting. All bank accounts will have a quoted interest rates of some description. This percentage figure is the annual return that the bank account provides. Overall, such interest rates can be either fixed or variable. Variable interest is interest that will go up or down, while fixed interest is interest that will remain fixed. Usually, fixed interest rates are higher than variable, and may be relevant only for specific periods.

Another thing to be aware of is that of bonus interest rates. Some bank accounts have short-term bonus interest rates usually for the first year the account is opened. While these bonus interest rates can be a good deal higher than the average interest rate, when the bonus rate expires they can drop back down to a much lower rate of interest. As such, it is worth checking what the lower rate of interest will be as well.

It is also worth checking whether a bank account has any fees or not. Some bank accounts may have a fixed monthly fee of a few pounds. These bank accounts usually provide a variety of offers and bonuses such as mobile phone deals, travel discounts, and other banking benefits that a more standard bank account may not have. However, equally the fees may amount to hundreds annually.

The ease of access of a potential bank account is also worth checking. Most current accounts will be easy access, but the same cannot be said of all saving accounts. Some saving accounts may not return the quoted interest if withdrawals are made during a specific time period. So this is also worth noting.

So, these are a few things that are worth noting before opening an account. The quoted interest rate, bonus interest rates, any potential account fees, and the overall ease of access of the account should be checked.