In the UK, banks like any other business, are having to earn customer loyalty. People often choose a current account with a bank and stick to it without considering the alternatives.  This contrasts with their behaviour in other areas.  They will shop around for the best savings, loans, mortgages and investments, yet plod along with the first current account they opened.

Part of this is inertia. It seems too much hassle to change especially when standing orders and direct debits have to be transferred.  Part of it is not realizing that not all current accounts are the same.  In fact, the products, facilities and charges can vary considerably between banks and even between different current account offerings within banks.

The basic things to check are –

What charges are levied.

What, if any, interest can be earned on the account.

What level of overdraft is offered and what the interest rate on it is.

What are the consequences of going over your overdraft limit, especially by minor amounts (for which some banks appear to charge unjustifiably high amounts).

You also need to consider what best suits your financial circumstances -

A joint account is suitable for married couples or long term partners but carries a joint liability for debts and if you fall out you will need to change the account.

A basic account is useful for people who need a current account for rapid access to money but don't have the credit record necessary to allow them to use a chequebook or borrow on the account; teenagers often open these sorts of accounts.

Some accounts have standard overdrafts, although this facility is usually only open to individuals who are getting regular salaries paid into their account.

Student accounts give free overdrafts, freebies and lots of discounts, but you need to be in higher education to have one.

Budget accounts which spreads the costs of your annual spend are attractive, especially to families, but are expensive and not that widely offered.

The new entries on the UK market are package accounts offering features like free travel insurance, discounts on credit cards and loans and commission free foreign exchange;  there are annual charges (around £ 100) for this kind of account but you need to be wary- first of all that you will use the perks to the full and second that they can't be got cheaper elsewhere.

Premier accounts are package accounts plus with many different facilities on offer (e.g. Accidental death cover, home repair service, discounts on fuel bills and so forth). However, you will be charged for these accounts, need to earn over a certain amount of money yearly, and have someone who advises you on your money to qualify for one.

Some banks also offer you IF (Intelligent Finance) using the interest on your current account to offset your mortgage. You can maximize this advantage by spending via credit card, keeping the account amount and interest high and then paying off the card only when the next salary comes in.

You should think about how you want to access your account.  Some people like the personal touch of the branch bank.  For others, an internet only account may be all they require and it has the advantage of offering higher interest rates than other interest bearing account offerings.  Others like the flexibility of both branch, phone and internet.

Once you have shopped around and decided which right account is for you, switching should be easy.  Both your current bank and the one you choose to move your business to are obliged cooperate in moving regular payments (like direct debits) across.

Tim Day is site designer for the UK finance sector for over 3 years. Currently writing for Creditmarket.co.uk