How to decide what my current account balance should be

If you just have the one current account that you use for everything, then you might rarely ask yourself how much money you should keep in it.

But even if you do only use one account, it’s worth remembering the limits that this can put on you – and it’s not just about reaching the maximum balance on which your bank will pay interest.

Having only one account means you only have that one way to access your money, so if anything goes wrong with that account, you could be left trying to deal only in cash, or even worse, left with no spending money at all for a time.

So the short answer is: keep enough in your current account to cover your outgoings, especially if you have regular bills set up by standing order or Direct Debit.

But give serious thought to whether or not you should have a secondary account elsewhere, ideally with a debit card and full online access to services like Direct Debit and Faster Payments.

Is it risky having only one current account?

Plenty of people manage their money with a single current account without any problems, so if your finances are fairly simple, this is not necessarily the wrong course of action.

But have a plan in place so you can still access money if you lose your debit card, fall victim to identity fraud, or if your entire bank goes bust.

An Arro Personal Account helps to protect you against these risks as a secondary account or even as your primary account, as with every Arro Personal Account you get:

  • Virtual debit card details via SMS so you can start making card payments immediately.
  • Our purpose-built and rigorously tested online money management platform.
  • Ringfenced customer deposits so you can always withdraw everything you pay in.

At Arro, our creditors will never have a claim to money paid in by our accountholders – that means your money is always yours to withdraw, without the need for a lengthy Financial Services Compensation Scheme claim, no matter what happens in the future.

If your account balance is higher than the limit of cover offered by the FSCS, an Arro Personal Account is a way to make sure 100% of your balance is protected against creditor claims; alternatively, you could use it as a secondary account so your entire balance is not held with just one financial institution.

Best practice for personal accounts

Whether you have a bank account or an Arro Personal Account, there are some examples of best practice that are wise to follow, and these can help you to decide how much to hold in your account.

For example, your primary current account is normally used for:

  • Receiving payments from employers, customers and other money-making activities.
  • Receiving monetary gifts from friends and family for any reason or purpose.
  • Paying regular bills e.g. rent, mortgage, gas, electricity and telecoms.
  • Everyday spending e.g. food and entertainment costs.

At the very least, you should make sure your current account has enough in it to pay the bills, plus some extra in case a payment is taken early (especially around bank holiday weekends) and to cover day-to-day spending.

Many people hold a secondary account elsewhere and just transfer across their weekly budget into their current account. This is a good way to manage what you spend and see how much you have in savings towards Christmas, holidays and other long-term spending goals.

Get an Arro Personal Account

You can use an Arro Personal Account as your primary current account or as a secondary place to keep some of your overall balance – remember, all customer deposits are ringfenced so there’s no need to rely on the FSCS to claim your deposits back, no matter what happens.

But as well as being a place to store funds, every Arro Personal Account has access to Faster Payments and Direct Debits via the Arro Money online dashboard; every account has its own sort code and account number for receiving transfers just as you would into a bank account; and every account comes with a MasterCard® debit card to use online, in stores and at ATMs.

You can apply in just three minutes by telling us:

  • Your name.
  • Your UK address.
  • Your date of birth.
  • Your contact details.

If you meet our simple Fair Fit criteria, live in the UK and are over 18, we guarantee to accept all eligible applications – and you’ll receive your account details and MasterCard® number within minutes.