Accounts

Choosing an account

When you start work you may need to open a bank or building society account to ensure that your money is kept in a safe place. Most banks have offers to entice people to choose their accounts. Some banks offer accounts with benefits but you may have to put a minimum amount of money into the account each month. This is usually your main source of money, normally your pay from your job.

Nia is looking to open a bank account. She has £1,500 which she plans to keep for her holiday next year. Her job pays £1,200 every month. Let’s work out which bank account would be the best deal if she kept the bank account open for a year.

FeatureBank ABank BBank C
Opening offer5% up to £1,200£150£7.50/month
Minimum pay in per month£800£1,500£600

Bank A

5% of £1,200

= \frac{5}{100} \times {1,200}

= £60

Bank B

Nia doesn’t earn enough money to get this account.

Bank C

There are 12 months in a year and each month she gets £7.50. So 12 × 7.50 = £90

Bank C would be the best deal for Nia.

Statements

Bank statements show how much money is going into and out of your account and are also a record of where you are spending your money.

You can access these statements at a cashpoint, through online banking or choose to receive paper statements through the post. The statements will show codes that mean different things.

Here are some of codes found on bank statements:

CodeMeaningDescription
DebDebitMoney leaving your account
DDDirect DebitMonthly payments taken from your account
DEP or CREDITDepositA payment into your account
S/OStanding orderAnother method of taking payments from your account
CPTCashpointWithdrawal from a cashpoint
curriculum-key-fact
These codes can change from bank to bank, so you need to make sure you look at what the different codes mean in your bank.

You will also see numbers on your statement - usually your account number and/or sorting code numbers.

Example

Here are Claire’s recent bank transactions:

List of transactions from a bank statement

1. How much is Claire’s salary?

Her balance has increased from £400 to £2,963. If we find the difference we will know her salary.

£2,963 - £400 = £2,563. This is Claire’s salary.

2. On 6 June Claire buys a car for £3,000. By what amount will she be overdrawn?

She has £2,596 in her account, She pays out £3,000.

The calculation we need to work out is:

£2,596 – £3,000 = £-404

So now she is £404 overdrawn.

Question

Here are Jamie’s recent bank transactions:

List of transactions from a bank statement

1. How much has Jamie spent on digital downloads in this time period?

2. How much will he have in his account after he pays for his festival ticket?

1. The balance has gone down from £172 to £155. The difference is 17 so he has spent £17 on digital downloads.

2. £175 - £78.50 = £96.50 meaning he will be £96.50 in credit.