Can I just do everything out of my savings account? What are current accounts for?

okay79

I've set up a Santander ESaver after reading the best saving accounts page. Now I'm wondering why I'd need a current account as well, can't I just do everything out of this one account? By everything I mean get salary paid in, pay bills, use the debit card in shops and get money from cash machines.

I'm not an expert on banking by any means and I wonder if I'm missing something here, but what are current accounts for if I can do all this from the ESaver and get a better rate of interest?

The only things I can think of are overdrafts (which I don't need at the moment, touch wood), and all the bonus things like travel insurance, which I don't want.

Mikeyorks

Most of us have a few Direct Debits? Not supported via savings accounts. And few Savings accounts support FP outwards if you need to get money somewhere in a hurry.

psychic_teabag

Savings accounts tend not to support direct debits. Not many do standing orders to arbitrary accounts (some do periodic transfers to your nominated account).

At the moment, Lloyds vantage current account pays better interest than ESaver (3% on balances from £3k to £5k, and 4% on £5k to £7k).

okay79

Ah... I have direct debits too, I've moved them over direct debits to the ESaver. I did a quick web search and found this page that suggests this account will support dds.

Thanks for the tip about the Lloyds one, those are much better rates.

So if there's a current account with better rates than a saving account, and this saving account supports direct debits... are 'current' and 'saving' just marketing terms, ways to indicate what the accounts are most likely going to be used for, but not necessarily the best way to use them?

missile

okay79 wrote: »

So if there's a current account with better rates than a saving account, and this saving account supports direct debits... are 'current' and 'saving' just marketing terms, ways to indicate what the accounts are most likely going to be used for, but not necessarily the best way to use them?

Shock horror banks may be misleading their clients - surely not :rotfl:

okay79

Hahaha, well I'm just learning about this and thought there might be other special conditions attached to them. It is funny though.

xrjtg

I think there may be differences in how savings and current accounts are treated by regulators: banks must keep a greater proportion of the money in current accounts "in reserve" to cover possible withdrawals. How they're distinguished for this purpose I don't know.

I can also add that using Lloyds Vantage as both current and savings account works perfectly.

Mikeyorks

okay79 wrote: »

Ah... I have direct debits too, I've moved them over direct debits to the ESaver. I did a quick web search and found this page that suggests this account will support dds.

I think that's misleading. This is a Saver account and it's unlikely to support DDs going out. Although it is possible it may support DDs inwards .... ie for you to fund the account.

If you want to check the fine detail of an account ... go to the provider. Don't rely on someone else to do it.

If you look at Page 5 /24 of this .... it shows the characteristics of the account. Paying bills by DD isn't one of them?
http://www.santander.co.uk/csgs/StaticBS?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1223411023006&cachecontrol=immediate&ssbinary=true&maxage=3600

okay79

Oh gosh, thank you so much for sharing that!

Mikeyorks

So I trust you're not in the process of switching any DDs across? As they will fail to stick on that account.

As earlier in the thread .... the Lloyds Vantage becomes your 'flexible friend' (gosh .... was that the early Barclaycard advert). It's essentially a current account .... so supports SOs / DDs / FP by nature. But has an extraordinarily good interest rate for balances between £5k and £7k.

okay79

Actually I switched them all to the eSaver last night - switching them all back to my current account now!