Basic bank accounts – how to apply and get accepted
MILLIONS of Brits don't think twice about using their bank accounts and the benefits that come with them everyday.
But what would you do if you get rejected from opening a standard current account?
Up to 1.5million Brits don't have one - and this is where basic accounts come in.
They're designed for people who don't qualify for a bank's current standard account - for example, they've got poor credit history and have experience of serious money problems.
So if you're struggling to open a standard bank account, we explain what you need to know.
How is a basic account different to a standard current account?
A basic bank account acts like most standard accounts - it lets you pay in and take out money, set up direct debits to cover regular payments, and most will give you a debit card to use too - but with one major difference.
Because they're designed for customers who have experienced serious money trouble before, most of them don't offer an overdraft facility.
The accounts are completely free of charge but if you've set up regular payments to cover your bills, make sure you have enough in your account to cover your payments.
You don't even need to have problems with money to open an account - if you think it'll help you budget each month and you don't want an overdraft, a basic account could work for you.
Basic bank accounts: what they offer
HERE'S what you need to know about basic bank accounts:
- Basic accounts are for people who have experienced serious financial diffiuclty and don't qualify for a standard current account
- Users can have benefits and wages paid in and set up standing orders and direct debits and can get a debit card - just like a normal account
- But the accounts won't offer any overdfraft facility, so you won't be able to borrow money with it
- Because of this, it's important you check your balance regulary, especially if you set up regular payments as you could be charged extra by the company if you fail to make a payment
- All the major banks are required to offer basic bank accounts by law - and some will let you open a joint account if your partner also qualifies
Although basic bank accounts offer fewer options than a normal standard account, the bank or building society still needs to check who you are.
You'll usually need to be at least 16 to open one, although for some accounts the minimum age might be 18 and you'll have to give proof of identity and address too.
This will usually be something like your passport or driving licence - documents and letters regarding any benefits you receive might also work - but it's best to check with the bank directly.
Most banks will also do a credit check, although this is usually just to make sure you are who you say you are.
If you can't provide proof of address, or identification, the bank could refuse your application.
It will also reject you if you think you're opening the account to launder money or commit fraud.
If you are rejected, the bank must tell you why it has and you are able to appeal its decision if you disagree with it.
You should be able to find one of the major banks and building societies willing to offer you an account but if you are struggling to get accepted, you might want to consider other options.
Which providers offers a basic bank account?
Any bank or building society can offer a fee-free basic bank account, but since 2016, the UK's nine largest current account providers have by law had to offer them in bid to encourage financial inclusion.
We've listed the major banks' basic accounts:
For most accounts, you'll be able to apply online or over the phone - but it could make sense for you to pop into your local branch and explain that you'd like to open a basic account.
They'll tell you what documents you need to bring in to prove your identity, how long it'll take to open, and if you're eligible for one.
What other options are there?
If you are rejected for an account, the bank must tell you why it has and you are able to appeal its decision if you disagree with it.
You should be able to find one of the major banks and building societies willing to offer you one but if you are struggling to get accepted, you might want to consider other options.
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Some Credit Unions now offer bank accounts, though you'll usually have to pay a fee of up to £1.50 a week.
If you're claiming benefits, and don't have a bank account, you could previously get a to receive your benefits.
But the account closed for new claimants in May, although existing users will be able to use it until at least November 2o21.