It’s hard to imagine not having a current or checking account these days. Once upon a time, many people kept the money hidden in their homes, and to this day, we still discuss the wisdom or foolishness of keeping our savings under the mattress. Banks offer a way to keep our money safe, and thanks to the digital banking technology we are surrounded with, we can access our money anytime we need to.
There are several different types of bank accounts, from a child’s first savings account to complicated corporate accounts. Still, the accounts that are used more than others are checking accounts and current accounts. These accounts are almost identical in nature, but there are some subtle differences that you can discover below.
What is a Checking Account?
A checking account is an account that accepts deposits of money but also facilitates withdrawals.
The standard method of making a withdrawal was by writing a cheque, which is simply a document with instructions to the bank as to how the money is to be withdrawn and, more importantly, to whom. This used to be the standard way for people to pay their bills as they could send the check with the bill in the mail. You could also write a check when shopping or paying for goods and services.
Cheques are very rarely used anymore, and many banks have eliminated them altogether in favour of EFTPOS terminals (Electronic Funds Transfer at Point Of Sale) and online banking transfers from your account to the account of your intended recipient.
What is a Current Account?
Now, in many ways, the current account is virtually the same as a checking account in that it is an account that allows you to manage your finances.
This type of account accepts deposits, and you can withdraw in a variety of ways. The bank’s client is issued with a debit card which can be used to withdraw cash via an ATM (Automatic Teller Machine) and use the EFTPOS service to pay for goods and services when you go shopping.
Can I Have a Chequebook with my Checking or Current Account?
With more people relying on internet banking and using their debit cards for shopping, chequebooks are being phased out.
Thanks to the internet, and the fact that we are constantly connected with our digital devices, we can conduct all of our banking business via a computer or smartphone. As a result, many banks have already stopped issuing chequebooks, and it seems that it won’t be long before chequebooks are a thing of the past.
What Type of Account Should You Open?
As checking accounts are pretty much obsolete, your financial institution will most likely offer you a current account. Talk to your banking provider’s customer service team, as many providers now offer a variety of different packages connected to your current account. In most cases, they will tailor a package specific to your needs.
As we mentioned earlier, it is almost impossible to function in society without a bank account. However, choosing the best one for you depends on your income and your spending habits.
💡 You can learn more about banking in the UK, with our guide to finding the best current account to suit your needs.