Choosing a bank account can be more difficult than a lot of people realize. Some people may think that all bank accounts are more or less the same – but in fact, different bank accounts can offer very different advantages.

There are a few things to think about. First of all, what kind of account do you want? A regular current account, perhaps, or a bad credit bank account? There’s also a ‘managed’ account, in which the account provider takes care of budgeting for you. An example of a managed bank service account can be found here.

Interest rate
A lot of current accounts offer little or no interest on your balance at the moment due to the low base rate, but some still do pay a reasonable rate. If you regularly receive money into your account (e.g. your salary), it could be worth finding an account that will offer something back on your balance.

But you will have to ‘balance’ this against the other benefits on offer – you might find that you’re better off with an account that doesn’t pay interest if the other benefits are good enough.

Overdraft facility
Even if you’re the kind of person who avoids debt like the plague, many people would argue it’s important to have access to some kind of credit for emergencies. Most bank account providers offer some kind of overdraft facility, and it’s worth comparing what the different accounts have to offer.

Ideally, you’ll want to find an overdraft with the lowest possible interest rate, but you’ll also have to consider the overdraft limit (an account with a £1,000 overdraft limit provides more protection than one with a £500 limit – but if you’d prefer to avoid temptation, you might prefer the lower limit after all).

An overdraft may not be necessary if you have a lot of money in savings or if you have a suitable credit card that you’d rather use, but it could still be useful to have.

Additional benefits
Increasingly, many banks are starting to offer ‘extras’ to entice customers. This might include things like free insurance, roadside recovery or access to better deals on the account provider’s other products, such as loans or mortgages.

Sometimes, the value of these extras can exceed what you would get back from an interest-paying account, so it’s well worth thinking about.

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