What is a basic bank account
Up to 1.5 million people in the UK don’t have a regular bank account. If that’s you, it can make doing simple things like paying bills a nightmare. A basic bank account are products that are designed for those with poor credit scores and don’t qualify for a standard current account. This may be due to not having any credit history built up or having money problems that has negatively impacted your credit rating.
Basic bank accounts offer fewer services than a standard current account without overdraft facilities. Most accounts will issue a debit card so you can make payments at shops and online as well is setting up direct debits and getting a cheque book.
Are they free of charges
Most of the accounts are. But you should be aware that basic accounts can still charge fees for other services such as same-day CHAPS payments, debit card spend abroad or withdrawals from private cash machines. It is worth ensuring you manage the bank account carefully that payments don’t bounce and fees are incurred.
What do I need to open an account
Usually these accounts need to be opened in person at the bank’s branch. When you go to the branch you will need to complete an application form with proof of ID and address. Banks will publish their own lists of acceptable ID so you should check these prior to visiting the branch.
Why don’t banks advertise these accounts
Most accounts will either charge a monthly/annual fee or offer an overdraft facility, all which you the customer pay for. This will make the bank money meaning they can offer ‘free’ services. However, with basic accounts that offer limited services they make a loss after the costs incurred setting up the account and providing the services. So, banks don’t advertise these accounts.
