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Banking by phone Find out whether the bank has a free or local-rate number for telephone banking and what services you can access by phone. This could make a difference if you contact your bank on a regular basis. 34 Book I: Organising Your Finances and Dealing with Debt Weighing balances Many banks require only £1 to open a current account, but some providers insist that you deposit a minimum amount of cash each month, or that your balance doesn’t dip below a set amount. If you don’t have much cash to spare, steer clear of such accounts because if your balance dips below, say, £250 you may forfeit your interest.

You won’t make the big returns you might have made on stocks and shares but at least you know there won’t be any losses either. Setting Up a Rainy-Day Fund Before investing for the longer term, you need to set up your own personal emergency (or rainy day) fund for contingencies that you can imagine but couldn’t pay for out of your purse or wallet. The fund should contain enough money to pay for events such as a sudden trip abroad if you have close family in distant lands, any domestic problem that wouldn’t be covered by insurance, a major repair to a car over and above an insurance settlement, or a vet’s bill not covered by insurance.

This card usually doubles up as a debit card so you can pay for goods in shops with the money debited from your account – usually the next day. Most current accounts also offer a cheque book. If you are over 18 you can also apply for an overdraft (see Chapter 4 for more details on these). We give you more of the specifics of current accounts in the following sections. Noting interest and taxes The interest you receive on the balance in your current account is subject to income tax and usually paid monthly.