What is a current account?
When people talk about their bank account, they typically mean their current account. That's because a current account is what most of us use to manage our day-to-day finances.
Our guide will walk you through how current accounts work, the different types available, and why you should consider our free-to-open Biscuit bank account.
What is a current account and do I need one?
With a standard current account you can pay in and take out money, buy items using a debit card and set up automatic payments.
They’re available through both traditional high street banks and digital-only providers. With Zopa, for example, you manage your money entirely through our app, built on Zopa’s award-winning banking service.
Having a current account isn't a legal requirement. However, in an increasingly cashless society, it’s hard to function without one. It makes it easier to receive your salary, pay your bills, and track your finances.
How do current accounts work?
Once you’ve opened your current account, you’ll be able to:
Pay in and take out money, whether that’s from another online account, or via a cash machine.
Use a debit card to purchase items in-store and online.
Set up Direct Debits and standing orders to make recurring payments. That could be an organisation collecting money via a Direct Debit, or you sending a fixed sum each month using a standing order.
Receive payments, such as your salary, pension or one-off amount.
Current accounts vs savings accounts explained
It is possible, to have both a current account and a savings account, as they serve different purposes:
| Current account | Savings account | |
| Purpose | Day-to-day spending and money management. | Storing and growing your money. |
| Access | Immediate access, with no fees to withdraw. | Varies by account. Some allow instant-access, others have withdrawal limits. |
| Interest | Most current accounts do not offer interest on your balance - though our free Zopa Biscuit bank account does! | Typically higher interest rates than those offered by current accounts. |
| Payment features | You can pay for goods and services directly from your account. | You won't be able to pay for things directly from your account. |
What types of current accounts are there?
Before choosing your account, you should consider what you want from it. For example, are you happy with a standard current account, or do you want one with more benefits? There are also some accounts you might not qualify for. Here’s an overview of your options:
Standard current accounts
A standard current account offers all the regular payment features, but without many extra benefits, like interest on your balance.
Basic current accounts
If you have a poor credit history, you may only be able to open a basic current account. You can still make and receive payments, but you won’t have access to an arranged overdraft or cheque book.
Premium or packaged accounts
Premium or packaged accounts usually combine a current account with some form of insurance, alongside other perks. This will normally come with a monthly fee.
Digital-only accounts
On top of the standard features, digital-only accounts can offer speedier, more convenient ways to manage your money. However, you won't be able to go to a branch to access in-person support and some accounts don't come with a physical debit card.
Student and graduate accounts
There are specific current accounts available for students (over the age of 17) and graduates that commonly offer interest free overdrafts, alongside a number of other perks, such as discounts and cashback.
Joint accounts
Joint current accounts allow multiple people to access the same bank account. This could be your partner, spouse, friend or housemate, depending on your circumstances.
Do I have to pay to have a current account?
Usually, it won’t cost you anything to open a current account. If you want a more premium account, which may come with additional benefits, you’ll need to pay a monthly fee. These accounts may also require a minimum monthly deposit (this can include your requirements like having your salary paid into the account).
When it comes to using your current account, most basic payment features are free. However, you may pay for:
Using your overdraft
Sending money abroad
Using your debit card outside of the UK
Withdrawing cash abroad
Do current accounts earn interest?
Unlike most savings accounts, not all current accounts earn interest. Those that do will pay interest on the balance in your current account.
Although this interest is usually calculated daily, and paid monthly, banks advertise an annual equivalent rate (AER) so you can easily compare products. AER shows you the rate you’d get if this monthly interest was compounded and paid once a year. Compound interest is when you start to earn interest on the interest you’ve earned, so each month you earn a little more than the last one until the end of the term.
With Zopa’s free Biscuit bank account, you’ll receive 2% AER* on your current account balance – with no limit on the interest you can earn. This interest rate is fixed for 12 months. After 12 months, it becomes a variable rate that may go up or down.
How to open a current account
Depending on your chosen bank, you can open a current account online, in-branch or over the phone. When opening a current account, you’ll need to:
Check your eligibility: most current accounts require you to be 18+. You should also check if it requires a monthly fee or minimum monthly deposit.
Gather your documents: this includes proof of ID (such as your passport, UK driving licence, or EU ID card) and proof of address (such as a recent utility bill, bank statement, tax document, or UK driving licence).
Provide your personal and financial details: you may be asked details about your employment and monthly outgoings.
Pass a credit check: some banks run a hard search on your credit file when you apply, which could affect your credit score. Others, like Zopa, use a soft search to verify your identity. This won't affect your credit score.
To apply for Zopa’s digital-only Biscuit current account, you can apply in-app – it only takes 5 minutes!
How to switch your current account
One common way to switch accounts is by using the Current Account Switch Service (CASS). It moves your existing payments, Direct Debits and standing orders to your new account, and then closes your old one.
Zopa isn’t currently part of the Current Account Switch Service (CASS), but opening a Zopa account is quick and easy — and you can keep your existing accounts open alongside it.
If your new bank or building society offers CASS, you can usually start the switch by asking them to move your old account. The process typically takes 7 working days, and you’ll still be able to use your old account until your chosen switch date. (Just avoid setting up new payments during that time.)
Can I have more than one current account?
There is no limit to the number of current accounts you can open, as long as you meet the bank’s eligibility criteria. However, it's always best to check if the bank you're applying with runs a hard search on your credit file, as this could impact your credit score.
There are multiple reasons you might choose to open more than one current account, including:
Taking advantage of different perks, benefits and interest rates.
Separating finances, such as using a personal current account for day-to-day spending alongside a joint account for household bills.
Easier budgeting, by having specific accounts for different expenses.
Why choose a Zopa bank account?
Biscuit is our free current account rewards you with:
2% AER* (1.98% gross**) interest on your current account balance, fixed for 12 months.
Exclusive access to a Regular Saver pot with an interest rate of 7.1% AER* (6.87% gross**) variable that you can pay up to £300 a month into.
2% cashback on your bills, on up to £1,500 of eligible Direct Debits each year.
Fee-free spending when using your debit card, wherever you are in the world.
This is on top of Zopa’s excellent 7-day a week customer support, easy-to-use app, and award-winning service.
*AER stands for 'annual equivalent rate'. We pay you interest on a monthly basis, but AER shows you the rate you’d get if this monthly interest was compounded and paid once a year instead. We provide an AER to make it easier for you to compare our rates with other providers.
**We pay gross interest, which means nothing is deducted for tax.
Open your free Biscuit current account
It takes only 5 minutes to open your free Biscuit current account – so what are you waiting for? Start spending, and earning, today!
Learn more about Zopa's Biscuit bank accountFAQs
What does ‘current account’ mean?
‘Current account’ is simply another term for your everyday bank account, which facilitates spending and payments. .
Can you have more than one current account?
You can open more than one current account, as long as you meet the bank’s eligibility criteria. This can help you manage your finances or benefit from different perks.
Does opening a current account affect your credit score?
Opening a new current account may temporarily lower your credit score. However, it will only have a long-term effect if you try to open multiple accounts in a short space of time.
Do you need a current account to get paid?
You’re not legally required to have a current account. However, it will be much harder for your employer to pay you if you don’t have one.
Can you open a current account without proof of address?
You’ll need proof of address to open most current accounts. However, some banks do offer basic current accounts for people with no fixed address.
