By the end of September more people will be able to open a Post Office current account. But there’s still no set date for a nationwide roll out.
The Post Office has announced it is extending its current account pilot to 129 more branches across the UK.
A further 76 locations have been added to the 110 already offering the accounts this month, but by the end of September the number will rise to 239 in total.
With many high-street bank and building society branches closing, the Post Office could be a real challenger with its ‘unrivalled network’ of 11,500 branches dotted across the UK.
However, there is still no set date for a nationwide rollout, so you’ll need to have a participating branch near you to apply. You can find your nearest one here.
What you can get
The Post Office offers three current accounts through the Bank of Ireland UK.
They can now be opened with just £20 (down from £100) and each come with a £100 One4all gift card incentive, which can be used with over 17,000 retailers.
The Standard account is the most basic and offers a debit card to use in the UK and abroad, cheque book and competitive overdraft at 14.9% EAR. It’s free to use as long as you stay in credit each month, but there are no unarranged borrowing charges if you accidentally stray into the red.
You can upgrade from a Standard account to a Packaged account if you’re after some added benefits. It costs £8 a month and comes with all the features of the Standard plus European multi-trip family travel insurance and Rescue Plus breakdown cover from Green Flag. You’ll also get discounts of up to 7.5% on Post Office holidays and travel.
Finally, the Control account has been designed for people new to banking or that regularly stray into the red. It costs £5 a month but doesn’t charge for bounced payments. Control doesn’t come with an overdraft or a debit card, but you’ll be able to set up standing orders and Direct Debits as well as withdraw cash from an ATM.
Although you can only open these accounts in selected areas for now, you can manage the account in any branch, online or over the phone.
Alternative current accounts
Right now you’ll only be able to benefit from the Post Office current accounts if you live near a branch included in the trial. But there are plenty of other options available no matter where you live.
Many now offer decent levels of credit interest.
[SPOTLIGHT]The Nationwide FlexDirect offers 5% on balances of up to £2,500 for 12 months when you deposit £1,000 a month, while the TSB Plus offers an ongoing 5% when you pay in £500 a month, but only on balances up to £2,000.
The Club Lloyds Bank account pays a slightly lower 4% on balances between £4,000 and £5,000, but also comes with the choice of three incentives each year. You'll need to pay in £1,500 a month to avoid the £5 monthly fee for this account.
Elsewhere the Tesco Current Account offers 3% on balances up to £3,000 and you can collect Clubcard points when you spend on your debit card, but you'll need to deposit £750 a month into the account to avoid the £5 monthly fee. And the Bank of Scotland Current Account with Vantage offers 3% on balances between £3,000 and £5,000.
The best account for larger balances is the Santander 123 Current Account, which pays 3% on balances between £3,000 and £20,000 as well as up to 3% cashback on household bills, which gets paid into your account monthly. This account attracts a £2 monthly fee though.
If you haven't got savings that could benefit from a high interest account you could go for an account that offers a switching incentive instead.
First Direct and Halifax offer £100 when you switch to their accounts, while the Co-operative Bank will pay £100 plus £25 to a charity of your choice when you open either a Standard, Plus or smile account.
Alternatively M&S Bank is offering £100 in M&S gift cards if you switch to its fee-free current account or £150 when you switch to its Premium Account which costs £10 a month.
But if you find you stray into the red regularly each month you could benefit from an account that offers a cheap or fee-free overdraft.
The Nationwide FlexDirect offers a 12-month fee-free overdraft, while the Santander Everyday Current Account and 123 Current Account offer four months interest free when you dip into the red.
However, some providers offer a set fee-free ‘buffer’. NatWest and Royal Bank of Scotland offer £10 to Select and Silver customers. But First Direct offers a £500 automatic overdraft with its 1st Account where the first £250 is fee free. Similarly both the M&S Bank current accounts offer a £500 overdraft, but this time the first £100 is interest free.
More on current accounts:
The best debit cards to use on your travels
How to switch your current account in 7 days