When you first deposit some money in a bank, you will create a bank account. An account is a type of file that details all the money deposited or withdrawn by the account holder.

Before computers,  accounts were recorded by hand in books called ledgers. Bankers used red ink to show when someone had withdrawn more money than they had deposited. Although the ledgers have gone, someone who owes their bank money is still said to be ‘in the red’. The opposite is ‘in the black’, which means there are sufficient funds in an account.

It is possible to have several different accounts with more than one bank. There are several different types of bank accounts. The two which will be most important for younger savers are current accounts and savings accounts.