Setting up a basic bank account

Image: a couple setting up a new bank accountHaving a bank account is important as it allows you to receive payments from work and also pay your bills.

If you've been turned down for a current account there's no need to worry, as you could still be eligible for a basic bank account.

Having a basic bank account will allow you to receive money and pay your bills, but won't have the option for additional lending (such as overdraft, cheque book or loans).

For many people, setting up a basic bank account can be a first step towards opening a current account later on, so it's well worth doing!
 

With a basic bank account you can:

  • have your wages, benefits, State Pension or tax credits paid directly into your account
  • pay in sterling cheques for free (you will have to wait four business days before the money is available for you to spend)
  • take money out at cash machines in the UK with a cash card. This is usually free, but some bank cash machines make a charge. Some convenience cash machines such as those inside small shops, on garage forecourts and in nightclubs may also charge you each time you withdraw money from them
  • take money out at the Post Office, and pay your bills by Direct Debit.

Some banks let you have a debit card to pay for your shopping and some let you pay your bills by standing order. Most let you take money out, pay money in or check your balance at bank counters.
 

What to expect when you open a basic bank account

In the first instance you need to talk to your bank or building society about opening a new basic bank account.

If you want to open a basic bank account and you meet the bank or building society’s conditions, you should generally be allowed to open one.

But there may be reasons why the bank or building society will not let you open an account.
 

Proving your identity:

The law says that banks and building societies have to identify new customers. This is to help stop criminal activities like money laundering. They will explain which documents they will accept as proof of your identity, although this may vary from one bank or building society to another.
 
They may ask you for a government issued document such as a passport or driving licence. If you don’t have these documents, they may accept other documents such as:
 
  • a letter from a government department or local council confirming your right to benefits suitable information of identity from a young person’s workplace or educational institution, or
  • a letter from a care-home manager or warden of sheltered accommodation or a refuge.
  • with a photograph – such as a valid passport, or
  • without a photograph such as a valid old-style driving licence – plus another document from an approved source.
Further options may be available if you are an international student, migrant worker, refugee, asylum seeker, prisoner or on probation.

You can use tables on the Money Advice service website to compare identity requirements for basic bank accounts.
 

Running a credit check

If the bank or building society needs to carry out a full credit check (rather than an enquiry) on you, they should tell you this and whether this may have an impact on your future ability to apply for credit.
 
If your application is turned down you are entitled to ask why and the bank or building society should tell you (unless there are exceptional circumstances such as suspicion of fraud or money laundering).

 

How we can help:

We're passionate about helping our customers to save money. And there are a number of ways we can help, including offering support on:
  • The best way to budget
  • How to open a bank account
  • How to claim benefits and understand the welfare benefit reforms
  • Top tips to reduce the cost of your bills
  • Grants and schemes you may be eligible for.

Interested?

Contact us today to find out how we can help - simply use the form below to get started.  You can also contact us in a number of other ways to find out more information about how we can help.

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