There has never been so much choice when it comes to banks. You can earn interest on your money while you are in credit and get a free overdraft if you want to splash out. No bank is perfect for everyone. So decide what you need, do your research and go for it – changing bank accounts has never been so easy. Eve cannot recommend a bank – but we can help you ask the right questions.

You work hard for your money – make it work for you. Don’t let it laze around in one of the High Street banks – they will pay you negligible interest on the money you have in your account. Go for a bank or building society that pays you a good rate of interest on the money you have in your current account. The best are usually on-line banks - Cahoot pays 3.7% on your current account or 3.8% if you do without a cheque book.

If you are thinking of buying somewhere to live, then you might want to consider an all-in-one account which combines your mortgage and your current account and your savings. The advantage is that your debt is reduced each month by the amount of your salary cheque meaning your interest payments are lower. Woolwich OpenPlan offers 4.75% and keeps your debt, current account, and savings in separate accounts.

One thing kids bring with them is debt. Sometimes you just can’t help going overdrawn for a few days – or even weeks – as the expenses mount up. So choose a bank account that offers the best deals on overdrafts. Beware banks that charge you a fee to arrange an overdraft AND a fee each time you use it AND charge you interest on top! Smile pays 3% on your balance and offers an automatic £500 fee-free overdraft at 9.9% but beware the £4.50 charge and 25% interest on an unauthorised overdraft.

If you want to go self-employed or start your own business, pick your bank with care. Many banks will charge you for every cheque you pay in or write and may also charge you for using your overdraft. One good branch-based account is Alliance & Leicester Business Banking . It pays interest on your credit balance and if your turnover is less than £100,000 there is no charge for money paid in or out apart from a £10 a month fee.

Interest rates change frequently. You can find the up-to-date information on financial products at www.moneyfacts.co.uk or listen to Moneybox on Radio 4 at noon on Saturdays and 24 hours a day on www.bbc.co.uk/moneybox

February 2003

e-mail Paul Lewis on paul@paullewis.co.uk