Open Basic Bank Account in UK

If you are a newbie in the UK, sooner or later you’re going to need a bank account. In the past decades, opening a bank account in UK banks was very challenging. But now; it is slightly easier.

More than one million UK citizens don’t have a bank account. However basic online bank accounts could support them enter into the banking system. Basic bank accounts product designed for poor credit scores.

Stick here to know whether you are eligible for a fee-free basic bank account or not. What documents are needed to apply for a bank account online, and how to use it.

What is Basic Bank Account?

The government introduced basic bank accounts in 2003 as a way of assuring everyone could fulfil their banking requirements. You can use basic bank account to pay bills and receive money, but it can’t be used for overdraft.

A basic bank account may be suitable if you don’t have a bank account or you are not eligible to open a standard account.

Basic accounts are quite limited products intended to offer the basic benefits and functionality you would expect from a standard account.

This could be because you haven’t been able to build up a credit history or maybe you have a poor credit history. Use a fee-free basic bank account until you qualify for a standard current account.

Basic online bank accounts offer less services than a standard current account, but you can:

• Pay in money and cheques for free
• Have your benefits, wages, and other earnings paid into your account
• Take out money from the machine or over the counter
• Check account balances at a cash machine, over the counter, or on your mobile
• Use a debit card to pay for online shopping

Who are Basic Bank Accounts for?

Some giant banks spend free £100 deals only to attract new customers for the top deals. But to get those deals you are must to pass a credit check. It is where the bank evaluates whether it wants you as a customer or not.

Your poor credit history, CCJs, or bankruptcy makes it difficult for you to get a standard account. In that case, you’ll need to open a free basic account to solve out your credit problems.

What do You Need to Open a Basic Bank Account?

For your identity confirmation, you’ll usually need one of the following:

• Current UK photo card driving license / UK full paper driving licence
• Passport
• Current European Union member state identity card
• HMRC tax notification or assessment letter
• Benefit entitlement letters, as well as pensions, Universal Credit and disability payments
• Identity card issued by the Electoral Office

Banks publish their own lists of acceptable ID and ask for proof of your address. If you can’t arrange for any of the above ID, you should better contact the bank to clarify the situation – they will tell you if any other ID proof is acceptable.

These include:

• a current council tax bill
• a mortgage statement or tenancy agreement
• a (less than 3 months old) electricity or gas bill
• a recent bank or credit card statement (not printed off the internet)

If you’re in the UK on study visa, many banks will admit a letter from your University’s admissions office approving your address.

Many banks also accept a letter from Jobcentre Plus to confirm your National Insurance number. They can also accept a letter from your employer, in case it’s less than three months old.

There is also another method. Before leaving for the UK, ask your bank to change your post address to your UK address.

After changing your address, request your bank to send you a bank statement to you at your new address by post, and you’ll get a document to proves your UK address.

Can You Open a Bank Account Before Arriving in the UK?

Yes, your home bank can set up an account for you if it is in correspondent banking relationship with a British banks. Many chief banks have these ‘international accounts’ which are designed typically tailored for non-residents to provide you with a great option to prove your UK address if you don’t have required documents.

Moreover, you can apply for an international account online.

HSBC basic bank account is a better option.

NatWest, Barclays, and Lloyds also offer international bank accounts.

Basic Bank Account Benefits

A basic bank account allows you to pay bills by direct debit. Payment by direct debit ensures that your bills are paid on time, and it can also ensure that you can qualify for a better financial agreement.

For example, many electrical and gas tariffs offer discounts to those who make monthly payments by direct debit.

You can also pay in your incomes, tax, benefits, and state pension to a basic bank account, you’ll get a debit card to withdraw money from an ATM.

Moreover, opening a basic bank account lets you to start building a banking history.

In that way you can open a smarter standard current account.

Basic Bank Account Negatives

A basic bank account is more limited than an everyday current account. The key difference is that you do not get an overdraft facility, because they are usually opened by people with a low credit scores or those with no previous credit history.

On top of that, none of the most competitive current accounts are basic bank accounts. You won’t earn a high rate of interest on your money; in fact you probably won’t earn anything at all, even with the best basic bank accounts. 

Are Basic Bank Accounts Just for Those with Bad Credit?

Typically, Yes.

In the United Kingdom, basic bank accounts are designed for those who have poor credit scores, and who won’t pass the credit check for opening standard bank accounts.

The only people who can’t qualify for a basic bank account are people with criminal verdicts for fraud or people who fail to prove bank’s ID checks.

Who does Free Basic Bank Accounts Suit?

The basic bank account is a good starting account for those who have never used a current account before to pay their bills and doesn’t want the enticement of an overdraft.

These are also suitable for those who have recently moved to the country.

Are Basic Bank Accounts Free of Charges?

Generally, yes.

Since January 1, 2016, basic bank accounts have been free of charges for the first time for bounced payments. However, you should manage your account wisely as the bank account will not charge you for unpaid direct debits.

Barclays, HSBC, the Co-operative Bank, Lloyds Banking Group (Bank of Scotland, Halifax and Lloyds), Yorkshire Bank, Clydesdale Bank Nationwide, and RBS Group (NatWest, Royal Bank of Scotland and Ulster Bank), TSB, Virgin Money and Santander banks offer these free basic bank accounts.

Keep in mind that basic accounts can still charge you for using the debit card abroad, and for some special payments from the account.

Cash Machines (ATMs)

Withdrawing money from a cash machine at a bank, Post Office bank account, or building society in the UK is free.

Beware: Private cash machines that are found inside shops will charge you but they will enquire you to agree the fee before withdrawal.

Can I Open a Joint Fee-Free Basic Bank Account?

Yes, you can open a joint fee-free basic bank account if you and your partner qualify to open one.

Who Offers Fee-Free Bank Accounts?

Any bank or building society would offer a fee-free basic bank account in UK, but the nine largest banks are compulsory to offer them since September 2016.

How Much Does a Fee-Free Basic Bank Account Cost?

You won’t have to pay fees for Direct Debits and failed standing orders. But, you will be charged for using your basic account abroad while travelling and while buying things in a foreign currency.

When You Might be Refused a Basic Bank Account?

They can refuse to open a new basic bank account if:

• You fail to provide proof of ID and address
• You can get another account, like a standard current account
• You decline a credit check
• Are aggressive, violent or abusive towards staff
• They consider you will use the account fraudulently or illegally
• If your application for free basic bank account is rejected, you are permitted to ask why.
• If you disagree with the decision and think you should allow opening a basic bank account, you may appeal to your building society or bank.

When Your Fee-Free Basic Bank Account Can be Closed?

Your building society or your bank can close your fee-free basic bank account and can move you onto a standard current account if you:

• Give false information
• Don’t use your basic account for more than two years
• Open another bank account
• Have used the account illegally or unfairly

They will give you a ‘written notice’ of at least two months’, in which you can appeal if you don’t agree.

Methew Harbor

Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project.