Every bank and building society in the land offers a range of bank accounts to choose from however some cost more than others to have. These costs not only come in the form of charges and fees though, they also show as lower interest rates and having an account with a lower than average interest rate means you earn less money on your savings and everyday balances over the years.

Researching the market is easy, as is switching to a new bank account, and by taking a few hours to compare the various options available you can easily save money. The following types of charges apply to most accounts however shopping around can get you better deals in some cases.

Charges for authorised and unauthorised over drafts
Banks make most of their profit from you when you go over drawn so if you do this regularly then it’s worth looking for an account with low charges. Most accounts have over draft charges of around 15% however it is possible to find good current accounts with charges as low as 8%. Some banks offer interest free over drafts up to an agreed limit and these are also worth looking at as well.

Charges for declined cheques, direct debits and standing orders
Another way that banks like to make their money is by charging for bounced cheques, direct debits and standing orders. This happens when you have insufficient funds in your bank account to pay the request and unfortunately for customers the banks don’t give a lot of leeway. This type of charge generally costs between £20 and £39 per declined request and so the cheaper the better.

Over draft renewal fee
Luckily not all banks include this fee in their over draft terms and conditions. The fee is an annual charge for your agreed over draft limit and is taken each year regardless of whether you use the facility or not. Generally it has a value of around 1% of your agreed limit and most are a minimum of £10. This may not sound like a lot but it’s a fee you don’t have to pay with some accounts.

Interest rates
Although interest rates don’t actually cost you anything in the true sense of the word they do affect the money you have in your account. Most current accounts have interest rates of below 0.5% however it is possible to find accounts that pay up to 3%. These accounts will have qualifying conditions though and these need to be taken into consideration. Savings accounts all tend to offer the same kind of interest rates however you can often get higher rates by agreeing to leave your money where it is for a set period of time or by giving notice before withdrawing it.

Charges and fees are only a couple of the things you need to look at when choosing a bank account however they are an important factor and shouldn’t be ignored.