A mainstay of British personal finances, the standard current account has spawned a variety of appealing personal bank accounts which offer holders added features. There are now specific accounts for students and children, and premium products for more affluent individuals. Current account products have been segmented in this way in order to increase their appeal to specific consumer groups, to provide more targeted marketing opportunities for providers and in order to increase provider profitability.

From a macroeconomic view, the current account market is driven by larger-scale factors such as population trends. However, new business can be generated by encouraging customers to ‘switch’ (change their current account provider). Since April 2003, new customers may also be acquired through conversions from basic bank accounts to fuller-featured current accounts.

Key developments in this market such as the introduction of interest-bearing sight accounts (sight accounts are current accounts or instant-access savings accounts) have increased competition among current account providers. This is because bank accounts can now be easily compared if consumers wish to use the level of interest offered on a balance as a guide. These and other issues pertaining to current accounts are looked at throughout this report.