You can use your bank account to pay money in and out in various ways. You will get information about your transactions and what charges you’ll have to pay.

We explain how you can run your account and what information you will get from your bank or building society, for example:

You are responsible for managing your money and making sure you have enough money (or overdraft) to cover any payments going out.

Your bank or building society must give you certain information about the payments you make or receive. It will tell you what information it needs to send or receive payments.

Be very careful that you give the bank or building society or someone who owes you money the correct information. They may not be liable if you give the wrong details – for example sort code or account number – and the money goes to the wrong place.

What the bank or building society will do
For electronic or cash payments made into your account, your bank or building society will give you:

Most banks or building societies will not charge you to receive payments but do ask if you are unsure. They must tell you if they do charge.

Payments into your account must be credited to your account on the day they are received. The money (except for cheques) must be available for you to use as soon as it is credited. This includes cash payments over the counter.

Paying in cheques
Cheques paid into sterling current accounts have a clearing cycle, often called ‘2-4-6’. This means that you start receiving interest on the 2nd business day after you have paid the cheque in (on Wednesday if you paid in the cheque on Monday), by the 4th business day (Friday) you can withdraw or spend the money, and by the end of the 6th business day (the following Tuesday) you can be sure the cheque has completely cleared and cannot be returned unpaid. Some cheques paid in late in the day may not be processed until the next working day.

Some banks or building societies will offer better terms, paying interest earlier and allowing withdrawal before day 4.

Cheques paid into savings accounts have a clearing cycle of ‘2-6-6’ – you have to wait till the 6th day until you can withdraw the money, but will then know that the cheque cannot be returned unpaid. Some cheques paid in late in the day may not be processed until the next working day.

Unpaid cheques – if a cheque you have paid in is returned unpaid because there is not enough money in the account, the bank or building society will usually take the money back out of your account and charge you.

Withdrawing cash – you can take cash out from most bank- or building society-operated cash machines, at the supermarket and other shops (known as cashback), or at your branch at no charge. There is a limit to how much you can get at one time or in a day, and your bank or building society must make these limits clear to you. This money is deducted from your account straight away. With some current accounts, you can withdraw cash at Post Office® branches.

Not enough money in your account – if you try to withdraw more money than you have in your account, or more than you have agreed with your bank or building society that you can borrow on your overdraft, they may refuse to make the payment. They must notify you if this happens, and you will know because your payment or withdrawal will be refused.

Using a debit card – you can pay for goods using your debit card at shops and businesses where you see signs for the payment systems which operate them, for example Visa, Maestro, Electron and Solo; their logo will be on your card. These systems have arrangements with your bank or building society to take out the money from your account and pay the retailer. The money is usually deducted from your available balance right away, although it may not be taken from your account until the next day. You need to authorise the payment by entering your personal identification number (PIN), although some retailers still swipe the card and ask you for a signature.

Blocking your card – if the bank or building society seeks to block your card, it must contact you and tell you it intends to do so, and say why. It can only be done on reasonable grounds, for example if:

It will explain in what circumstances it can do this before you open your account.

If it can’t contact you before blocking your card, it must contact you immediately after doing so, using the means of communication agreed with you. However, this does not apply if providing this information would compromise reasonable security measures, or would be unlawful, for example if it would be ‘tipping off’ under anti-money laundering legislation.

The bank or building society must unblock your card as soon as is practical when the reasons for blocking it end.

Tell the bank or building society if you’re going abroad to avoid them blocking your card for suspected unauthorised use.

Paying bills – you can pay bills by Direct Debit, standing order, cheque, telephone or internet banking. You should ask your bank or building society how long it will take for payments to arrive and when it will be too late to stop a payment from leaving your account if you change your mind (and any charge for this).

On a cheque, always clearly write the name of the person you are paying and put extra information about them on the cheque. If the cheque is to an organisation, bank or building society, then always add details to the payee line such as a reference or account number. Make sure you draw a line through any blank spaces on the cheque so unauthorised people can’t add extra numbers or names.

Some banks and building societies are now using the Faster Payments Service (FPS) for internet, phone or standing order payments. This means that payment can be made on the same day for standing orders and within two hours for phone or internet payments. They will tell you when your account is ready to use the FPS. You can check that the receiving account is allowed to receive faster payments by asking your bank or using the UK Payments Administration sort-code checker – see Related links.

For information about using cheques safely, paying safely online and an explanation of what happens when you pay by debit card, visit the UK Payments Administration website – see Related links.

Charges – most banks and building societies do not charge for payments out of your account while you are in credit. If they do, you can ask them for the total charges and a breakdown of how they are made up.

They must tell you about any exchange rates and how long any payment will take to arrive. They should make this information available for every transaction, as each one occurs or at least once a month – probably in your statement.

Banks and building societies will generally charge you if they can’t make a payment for you because you don’t have enough money in your account.

You will not be charged for withdrawing cash at Post Office® branches using a cash card.

For almost all accounts, your bank or building society will provide you with regular statements so you can see:

The statements may be monthly, quarterly or yearly, depending on the type of account. They’ll usually come in the post, but if you use internet banking you may receive them online.

You can also get mini-statements from cash machines which show transactions over a particular time.

Some accounts come with a passbook which you need to take each time you pay in or withdraw money. The cashier records your transactions and any interest paid on your savings in it. If this is the case, you may not get statements.

Make sure you keep track of how much money is left in your account, because if you go overdrawn you may be charged.

Keep track of where your money is going and keep your bank statements in a safe place. You may need them for tax purposes.

It's a good idea to shred any personal data once you no longer need to keep it – this helps protect you against identity fraud – see Stay safe.

You may decide to switch accounts either to another account with the same bank or building society or to an account with a different bank or building society. Check the interest rate and overdraft charges to see if you'd be better off. Your existing provider must help you switch and may arrange for existing standing orders or Direct Debits to be switched.

Some banks offer an automatic switching service when you move your account to them, by arranging to contact your employer (for your pay), and any regular payments that you have set up, to move them over. For more information see the Bacs website – see Related links.

You can close most bank accounts at any time, without charge or penalty. If there are conditions on closing the account, as in a term deposit account, your bank or building society must make these clear to you before you open the account. If you decide you still want to close the account before the term is up, you may lose interest or have to pay a charge.

Your bank or building society may also decide to close your account. If it is going to do so, for most accounts, such as your current account or an instant-access savings account, it must give you two months’ notice. For other accounts, you should be given reasonable notice to enable you to make other arrangements.

Your bank or building society should not close your account because you make a complaint against it.

Branch availability or closure
If your bank or building society plans to close or move your branch it must give you reasonable advance notice.

It can do so:

It should also give you information on the nearest alternative branch and its nearest free cash machine.

Your bank or building society must tell you about any changes to interest rates as they apply to your current or instant-access savings account. They have to give you two months’ notice before reducing it, unless it is to your advantage or it tracks a reference rate (for example the Bank Rate). So if your bank or building society plans to reduce the rate in October, they should tell you about it in August.

For other accounts, such as notice or term deposits, your bank or building society will inform you in advance of any reductions to the interest rate that will make a significant difference to you.

They should give you the information in good time before the rate reduction takes effect.

You can always ask your bank or building society about the rate which applies to your account.

Any interest on the money in your account is considered as income by Her Majesty’s Revenue and Customs (HMRC). The interest you receive will be the amount after the bank or building society has deducted tax at the basic rate, which it pays to HMRC.

If you’re on a low income, or don’t pay income tax, you may be able to claim tax back or not pay it at all. For more information see HMRC’s website – see Related links.

If you’re a higher-rate income taxpayer you will need to declare this income on your tax return and pay any extra amount to HMRC.

You can receive your interest tax free with a cash ISA. There is a limit to how much you can pay into these accounts in each tax year – see ISAs.

A bank or building society can make changes to the terms and conditions of your account. It must notify you of any proposed changes before they are due to take effect to give you time to close the account or make other arrangements. For most aspects of current accounts and instant-access savings accounts, they must give at least two months’ notice.

You may agree to your bank or building society making changes without your agreement. When you receive notice of the changes you can still reject them but your terms and conditions may say that if you do so, you will be giving notice to terminate the account. So check the terms and conditions.