Banks still are the most popular and effective institution for dealing with your money needs. When you consider the mammoth scale of the operation they undertake you will, hopefully, have some sympathy with them when things go wrong, as they inevitably do from time to time. In recent years they have been reforming themselves to get rid of their old image. Today you, the customer, are queen!
A major clearing bank in this country will be dealing with some 4 million personal accounts alone, and in addition handling huge amounts of work in relation to business and commercial banking both in this country and internationally. Every day there are transactions running into many billions of £s which have to be undertaken quickly and effectively.
A current account will probably be your first choice - it enables you to do all of the following:
� Pay money into and out of your account, by depositing cash or cheques or having payments made direct to your account from some other bank or branch. Your employer, for example, can pay your wages or salary directly into your account; this is much safer for you than handling cash or even cheques.
� Pay bank drafts. The bank draws its own cheque payable to the person you want, deducting the value from your account. The draft is almost the same as cash and is particularly useful for deposits on houses or motor cars.
� Keep your money safe until you need to spend it or decide where and how you want to save it.
� Withdraw cash - either over the counter, or by the use of an automated teller machine (ATM), now a familiar sight in or near banks and at other venues.
� Make payments to others on your behalf, direct from your 'account.
� Borrow, if the bank agrees.
Useful services resulting from having a bank current account include the use of a cheque-website and a cheque card guaranteeing that the bank will honour your cheque (to a limit of £250 at present).
The bank also offers standing order and direct debit services for current account holders. It is important for you to recognize the difference between these:
� Standing order. This is an instruction to the bank. It asks them to pay a certain fixed amount, usually each month or year, to some person or organization you identify (on a specific date if you wish).
� Direct debit. This is an authorization you give the bank to make payments from your account to a named organization. The payments may be fixed or you may give the recipient the authority to change these. The latter is called a variable direct debit. Variable direct debits may frighten the nervous because the control of your money passes from you to the organization to which you are paying the money. However, the arrangements have to be approved by the bank first, and the organization has to report to you what it is asking the bank to pay to them. There are rules to be observed and any payments made in error out of your account must be refunded.