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Bank account

Bank account

According to some of the fascinating old things archeologists have dug up, people have been using money in some form for at least 10,000 years.

Banking and lending soon followed, with archaeologists also finding codes of laws that governed how banks should behave dating back almost 4,000 years.


Archeologists have found evidence of money being used for 10,000 years. Image credit: Alatariel.

Roll forward to the modern day and banking is ubiquitous. Everyone needs a bank account, as it is very difficult to effectively navigate the modern economy without one.

Need to receive your salary or social security payment? Deposit it in your bank account.

Want to avoid forgetting to pay your utility bills or your rent? You’ll need a direct debit or standing order from your bank account.

Financial Inclusion

Everyone needs a bank account, but financial inclusion rates vary greatly.

Cashless society

The world seems to be inexorably moving towards the concept of cashless society. In Sweden by the end of 2017 less than 20% of transactions completed in stores used cash. An ever increasing number of stores no longer accept cash as a form of payment.

Contactless payments by card or phone are rapidly becoming the default payment method in the sandwich shops, supermarkets and pubs throughout the city of London… where you can no longer catch public transport using cash.

That is something to reflect upon if your remuneration is dependent on customers leaving tips!

The humble current account

Branding aside, good current accounts are very similar :

  • You can deposit and withdraw money whenever you like.
  • Funds are protected by a government guarantee, up to a surprisingly large number.
  • You can control your account via internet banking, from a computer or phone.
  • Offers a contactless payment card to make paying for things easier.
  • Allows you to set up bill payments, recurring standing orders, and direct debits.
  • Some still offer cheques, though why anybody still requires such antiquated payment method is beyond me… it has been years since I wrote my last cheque!
Fees are optional

Bank fees are optional.

Fees are optional

Current accounts should be free from account keeping and transaction charges. Your bank benefits from you choosing to deposit your funds with them, not the other way around. In fact, your bank generates considerable income via lending your funds out to others in return for interest payments.

Premium” accounts ship with a host of extras in return for a fee. Before signing up, validate whether the benefits you receive is worth the price paid. Do you need them at all? Could you source those products yourself for a better price?

Be realistic when evaluating accounts offering incentives like “cash back” or loyalty points. In the right hands these features can provide great benefit, but for many the fees may outweigh the actual benefit realised. Anyone who has tried to “travel hack” a family holiday during peak holiday season can attest to this!

A tool in your toolbox

When evaluating current accounts, also consider your broader financial arrangements. For example, a mortgage offset facility may turn an otherwise innocuous current account into an interest saving juggernaut.

Shop around

Periodically re-assess which bank account is the best product for you. Competitive pressures see banks forever updating and changing their offerings. The best deal today may not be the one you would choose this time next year.

Like paper based cheque payments, bank loyalty is an antiquated concept belonging in the past!

Next steps

  • Use a comparison website to evaluate the best bank accounts for you.
  • Open the bank account most suited to your circumstance (you will need your proof of identity, address, and tax identifier if you have one).
  • Periodically validate if the account you have remains the best deal for you.
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Comments on this entry are closed.

  • The Rhino 15 January 2018, 10:50

    I was thinking about the implication on begging in a cashless economy
    I’ve not had any shrapnel in my pocket for months now..

    • Slow Dad 16 January 2018, 07:40

      You raise a good point Rhino. Cashless payments can easily purchase some fruit or a supermarket sandwich for somebody panhandling outside the local Tescos… but if what the person really wants is to invest the donation in their next fix (regardless of whether their drug of choice is heroin or low cost index funds), then their options are more limited.

      Also the chuggers harassing commuters outside the tube stations during peak hour return home with empty buckets, which pushes them down that (impossible to escape) subscription model.

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