A basic bank account is useful if you don’t qualify for a standard bank account. It means you can pay for things and receive your wages or benefits but you can’t go overdrawn.
Basic bank accounts should be fee free, which means you don’t have to pay to use them. There’s no overdraft facility, so you can’t spend money that you don’t have. A basic bank account should let you:
- Pay in and take out money at a bank branch or cash machine
- Have wages, benefits and/or tax credits paid in
- Pay bills by direct debit or standing order
- Pay in cheques and money at your bank.
You need to be over 16 to have a basic bank account. Your credit history won’t be assessed because you won’t get an overdraft.
Who uses basic bank accounts?
Most people who use basic bank accounts have had serious debt problems in the past (such as bankruptcy etc.) but they aren’t the only people who have basic bank accounts.
People who have existing debts: debt advice charities, such as Stepchange, often recommend that someone with existing debts opens a basic bank account away from the bank they owe money to. This is to give them better control over money they have coming in (whether it’s wages or benefits). Some banks won’t let you apply for a basic account if you already have a bank account with another bank.
People who have difficulty proving their identity: Most standard bank accounts ask for a driving licence or passport as a minimum form of ID, along with documents to verify your address. A basic bank account may accept documents such as an original benefit notification letter or a letter from a GP or social worker as proof of identity.
Who offers basic bank accounts?
The big banks in the UK have to offer free to use basic bank accounts. Those offering these accounts include:
Barclays
It offers a Basic Bank Account which will let you bank online (including via your mobile), over the phone or in a branch. You can get a debit card or a cash card that will let you withdraw cash from a machine. You can also take cash out at a Post Office. However, there’s no cheque book. Find out more at Barclays.co.uk.
Virgin Money
With the M account, you can use Virgin Money’s mobile app for smarter money management, plus have access to a linked savings account. You can open this account with little or no credit history. Learn more at M account.
Co-operative Bank
It offers a basic bank account called a Cashminder. It has no cheque book but it is available as a joint account. Find out more at Co-operativebank.co.uk.
HSBC
It has a Basic Bank Account that gives you a debit card and lets you manage your account online (including via a mobile), over the phone or in a branch. Learn more at HSBC Basic Bank Account.
Lloyds Banking Group (including Halifax and Bank of Scotland brands)
These banks offer a basic account. You can bank online, over the phone, in a branch or via your mobile. You can also take money out at a cash machine and pay using your contactless debit card. Learn more at Lloydsbank.com.
Nationwide
Its basic bank account is called FlexBasic. With most basic bank accounts you have to be 16 or over but Nationwide’s is only open to you if you are 18 or over. You get a debit card which you can use for contactless payments, you’ll also get free text alerts if you’re close to going overdrawn. You can withdraw up to £500 a day, if you have enough money in the account. Find out more at Nationwide.co.uk.
Royal Bank of Scotland (including NatWest and Ulster Bank brands)
These banks offer a basic bank account called a Foundation Account. You can withdraw up to £300 a day and can bank online, over the phone or in a branch. You get a debit card to make payments and withdraw cash. You cannot apply for this account directly. You have to apply for an account at NatWest or RBS and they will decide which is the best account for you. There’s no cheque book with this account. Learn more at Natwest.com.
Santander
Its Basic Current Account gives you two different cards: a top-up card which you can use for purchases and a cash card which you can use to take out money from a cash machine. You can only use your top-up card once you’ve transferred money from your bank account (you have to load it up in the same way as a pay as you go phone). The top-up debit card isn’t contactless. Find out more at Santander.co.uk.
TSB
TSB’s basic bank account is called the Cash Account. You won’t get a cheque book but you will get a debit card. You can bank online, over the phone or in a branch. Find out more at Tsb.co.uk.
In all cases you have to be a UK resident to qualify for one of these accounts.