Finding the Best Bank Account

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On the hunt for the best bank account?

Hmm, before we launch into this we need to understand the phrase “best bank account” – it means something different to everyone searching – so let’s make a start…

What sort of bank account is right for you?

Lets’s face it, we all have different spending habits and this is usually shown in our bank balance – some of us are always in credit, some of us are constantly overdrawn (I’ve just put my hand up!) and the offers that banks put on the table usually take these factors into consideration. The competition for bringing in new customers, and keeping them, is fierce. Look at this way; have you recently told your bank that you’re moving your account to a competitor? If so, you’ll no doubt have had a barrage of info such as why it’s best to stay with your existing bank, more options that can save you money, explanations of why your new bank is ‘evil’… the list goes on. (When I say ‘evil’, I mean that you’re current bank will paint themselves as a shining example of how a bank works compared to their competition.) The bottom line: it’s never easy making a decision.


There is one thing that holds many of us back when it comes to moving our accounts: Direct Debits, Standing Orders etc – it used to be a real pain filling out paperwork to inform the companies of your new bank details. I have to admit that this stopped me from moving on a couple of occassions. A piece of good news that should encourage you; banks now have the ability to automatically transfer standing orders and direct debits. This makes moving your account far simpler. Top tip: keep your old account open for a while after you’ve switched just to make sure that payments are no longer being processed by your old bank.

Which bank account is best?

Ok, let’s head on back to our original questions; first, are you always in credit? By this, I mean do you never touch your overdraft facility at all, not even by a few pennies? If so, you need to look for the best in-credit accounts on the market. Currently, the best option is the New Alliance & Leicester Premier Current account. If you join online before 28 May Alliance and Leicester will give a £100 sign-up bonus plus 0.5% in-credit interest, but you have to you pay in £500/month. An added bonus with this account is they will also give a 0% overdraft for the first year (but because you’re always in credit you are not going to use that, are you?). After the first year is up, you’ll pay a usage fee of 50p a day (up to £5 a month) applies after that. Your maximum overdraft limit will be £2,000.

Before you rush off to your local branch, read this – in order to qualify for the £100 bonus, you have apply online, and use their ‘Premier Switching Service’ to move all of your direct debits/standing orders to your new account. You also have to pay in at least £500 from a non-Alliance & Leicester account within 11 weeks of opening. The bonus should be paid within four months of grabbing the deal.

Still wavering? Here’s a couple more bonuses for you – Free annual multi-trip European travel insurance worth up to £60 and a referral service which pays £25 to both you and a friend if you refer them. An easy way to earn some free spending here would be to team up with a few friends who are planning to switch banks and refer them…but I do not endorse this method!

What’s the catch? Yeah, there’s always one thing that could put the brakes on. In this case, you don’t qualify if you’re held an Alliance & Leicester OR Abbey account in the previous three months!

Next up, are you use your overdraft facility? If you’re regularly in the red you’ll want a bank account that has minimal charges for using your overdraft. So which bank has the cheapest overdrafts? Guess what? It’s the Alliance and Leicester Premier Current Account that wins hands down. Just scroll back up to check out the details. You will notice that there is a catch with this account – if you’ve held an A&L bank account in the previous 3 months you don’t qualify for the freebies. If you’re one of the unlucky few, maybe you should take a look at the Abbey. They are offering 0% overdraft for 12 months but after 12 months you will pay an Advance Overdraft rate of only 12.9% EAR. Another bonus with this account is that when you switch, Abbey will offer to match your previous overdraft (up to a maximum of £5,000.) To qualify of this account you must deposit at least £1,000 per month.

Ok, that’s the two major groups covered but what about the ‘in-betweens’? There’s no hard and fast rule here. You could switch your bank account based on the information above or you could simply go down the path of shifting your overdraft onto your credit card. To some of you this might seem like an odd idea but in some cases the APR on your card is actually lower than your bank account overdraft fees. At the end of the day, you’ll have to get back to good old fashioned arithmetic and work out the best option for you.

I haven’t laid out all the options available to you; simply searching around and comparing offers is probably the best way to go. One point to note when looking for the best bank account alternatives for yourself – ALWAYS READ THE T&C’s. Got that?

We know we’ve had some US readers, so here’s a link for you (because we know the way our banks over here work in a slightly different way to your ) – choosing a bank account

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