What is a current account?

A current account is a bank account designed to manage your income and day-to-day spending. You can use a current account for: 

  • paying your bills
  • receiving your salary, benefits, pension and other payments
  • setting up Direct Debits and/or standing orders to enable regular payments
  • paying for items with a debit card
  • withdrawing cash from a cash machine

With a current account, you may also be able to set up telephone, online and mobile banking to easily check your balance, see your transactions, transfer money, and apply for an arranged overdraft.

How does a current account work?

Knowing how a current account and its features work may help you get the most out of it.

Do you have to pay to have a current account?

It depends on the type of account you have. Most banks offer a standard current account that doesn’t cost anything to open or manage. But there may be a monthly fee and the use of additional benefits.

Will I earn interest on my balance if it's in credit?

Again, this depends on the type of account you have. Most current accounts do not pay  interest on your balance. Those that do pay interest can sometimes have conditions attached. For example, there may be a monthly fee or you may have to pay in a certain amount each month. Always check the details of an account when you apply.

How do arranged overdrafts work on current accounts?

An arranged overdraft can act as a short-term safety net. You can borrow money up to an agreed limit so you can spend more money than is in your account. You’ll only be charged for the amount you use.

With a Lloyds Bank arranged overdraft, you will usually be charged daily arranged overdraft interest on the day you use it. However, if you bring your account back in to credit by the end of the day, you will avoid arranged overdraft interest for that day. This may not be the case on arranged overdrafts with other providers.

Learn more about overdrafts

Direct Debits and standing orders

These are regular payments you can make from your current account. Although there are differences, both allow you to make scheduled payments to people and businesses, so you don’t forget to pay them.

The main difference between a standing order and a Direct Debit is that a standing order is always the same amount each month while a Direct Debit can change each time.

Another difference is that you set up a standing order personally, while the organisation you are paying arranges a Direct Debit.

Learn more about Direct Debits and standing orders.

Do I need a current account?

A current account isn’t a legal requirement but having one often makes managing your money a lot easier. It helps to keep your money safe and makes it easier to pay for things in person or online. You will also need a current account if you want a debit card, and will usually need one to set up standing orders and Direct Debits.

Most employers will also require you to have a current account so they can pay your wages.

Types of current account

There are several types of current accounts available for different needs, including:

Standard bank accounts

A regular account that lets you make and receive payments. It usually won’t cost you to have one but won’t come with many extra features.

Packaged bank accounts

Current accounts with extra benefits. These can include breakdown cover, discounts and insurance. Monthly fees usually apply.

Joint accounts

A bank account that is shared between two people. Can be useful for paying joint expenses, such as a mortgage. The financial records of the account holders will be linked.

Business bank accounts

Keep track of business funds. Different accounts may be available depending on the type and size of the business.

Learn more about business bank accounts.

Student bank accounts

For those on a full-time degree course or equivalent, interest-free overdrafts up to a certain amount are usually available.

Child and youth accounts

For young people who want to learn how to manage money. May include debit cards, credit interest and unlimited withdrawals, but might have certain restrictions.

Basic bank accounts

A basic bank account may be offered if you don’t meet the requirements for other accounts. This could be because of bankruptcy, financial difficulty, or issues with credit history.

There’s no monthly fee and you’ll still be able to make a receive regular payments. However, some features such as an arranged overdraft won’t be available.

Frequently Asked Questions

  • Current accounts are offered by:

    • High-street and online banks
    • Building societies
    • Credit unions

    They’re also sometimes offered by smaller companies that specialise in current accounts for those with poor credit histories.


  • You can usually open a current account via a bank’s website, over the phone or at a local branch. You’ll need proof of ID and address before your account is opened.  

    Commonly accepted documents are:

    • Passport (UK issued)
    • Driving licence (UK issued)
    • Bank statement
    • Utility bills
    • Biometric Residence Permit Card

    You may also need to give personal information and contact details, as well as other information such as your income and expenditure.

    To open a student bank account, you may need to provide proof of the qualifying course being studied, such as an acceptance letter or UCAS code.

    At Lloyds Bank, in most cases you will only need to produce one of the following:

    • a current UK photo driving licence
    • passport from the United Kingdom
    • Biometric Residence Permit Card (accepted for account opening only)

    If you are an existing customer, you can use your existing bank card with Chip & Pin to verify your identity.

    If you cannot provide one of the items above, you will need to bring two documents. You can find a full list of acceptable documents on our proof of identity webpage.

    Learn more about how to open a current account.


  • You must be a UK resident to open an account with most UK banks.


  • Switching current accounts is easy with the Current Account Switch Service (CASS). This service guarantees the switch is completed within seven days. Your old bank gets in touch with your new one and any Direct Debits and standing orders gets switched over, for free. Any payments made to you old account will also automatically be redirected to your new account.

    Find out how you can switch to Lloyds Bank.


  • There is usually no limit to the number of providers you can have a current account with. However, there may be a limit to the number of accounts you can have with a single provider, so it’s best to check any terms and conditions before you apply.


  • Just having a current account won’t have a major impact your credit score. You might find your credit score goes down if you open accounts often, but this should only be temporary.

    The way you manage your money may influence your credit score. If you miss bill payments or use an unarranged overdraft, then your score could go down.

    Learn more about what affects your credit score.


Lloyds Bank current accounts

From no frills, everyday banking to accounts packed with extra benefits for a monthly fee, take a look at our range of current accounts.

Current accounts