Basic bank accounts

Aim of this page

If you’re looking to open a bank account then the simplest account to open is a basic bank account. This page looks at the benefits you can expect from this type of account together with information on the alternatives if you’re unable to open a basic account.

It’s part of our information section on banking.

Why is this important?

Life without a bank account can be very difficult especially if you need to set up direct debits, pay utility bills or have your salary or benefits paid in.

Basic bank accounts are ideal for people who don’t want an overdraft (or can’t have one) or have a low credit score and may struggle to open a classic current account. You’ll need to be at least 16 to open a basic bank account, although for some banks the minimum age is 18.

A basic account will give you all the benefits of a typical current account but allows you to control your spending.

What do basic bank accounts offer?

Basic bank accounts are free to use and designed for people who don’t have a bank account and don’t qualify for a standard current account. They can be the first step towards opening a regular account later on.

They offer fewer services than a standard current account and they don’t offer any overdraft facilities. However, you will generally be able to:

• Have your wages, benefits and other income paid into your account.
• Pay in money and cheques for free (as long as they’re not in a foreign currency).
• Take out money over the counter or from a cash machine.
• Pay regular bills by direct debit or standing order.
• Check account balances over the counter, at a cash machine or on your mobile.
• Use a debit card to pay for things in shops and online.

Who offers fee-free bank accounts?

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

Choosing the right bank

Before you open an account there are some general things to think about:

1. Check that the cash machines you want to use regularly are free.
2. Find out if there is a local branch of your bank or building society, or a Post Office, where you can pay in money and check your account.
3. Check if there is a buffer zone that lets you take out a small amount, say £10, even when your account balance is low so you can still get money using a cash machine.

Alternatives

If you have tried but can’t open a basic bank account, you might need to look at alternative options. Although we can’t give financial advice, there are a few alternatives below, and you should seek independent financial advice from organisations such as CAB or the Money Advice Service, as they can help you decide what is best for you.

Post Office Card Account

If you can’t open a basic bank account, you could consider opening a Post Office card account, which is specifically designed for receiving benefits, state pensions and tax credits. However, you cannot receive wages into this account.

Credit Union Current Account (CUCA)

You could look at those credit unions which offer the CUCA.

CUCA’s have facilities for wages and benefits to paid directly into, and along with direct debit, standing order and bill payment facilities, members receive a full range of day-to-day banking services direct from their credit union. There is normally a small weekly charge (usually around £1 –£2) for a CUCA.

Credit unions can only open accounts for people who fall within the credit unions ‘common bond’. This is normally based on location. If applying while in prison, you will need to apply to one that covers where the prison is based. You may be able to find this out in the prison, or ask somebody to use www.findyourcreditunion.co.uk on your behalf.

Prepaid cards

These can be useful for people who have a record of fraud and have been refused by a main-stream bank. We have more information here.

Reasons for refusal

Record of fraud

All account providers reserve the right to reject applications from people who have a ‘record of fraud’ as a result of money laundering regulations. This does not mean anyone convicted of an offence that could be considered fraud cannot get an account. For example, banks would not usually decline an application from a person convicted of providing incorrect information when claiming benefits. Banks do not have access to criminal records, however they do have systems to detect applications from people who have a record of fraud against financial institutions, such as banks and insurers.

Undischarged bankrupts

Most banks also reserve the right to reject applications from people who are ‘undischarged bankrupts’. This is someone against whom a bankruptcy order has been made and who has not been discharged from bankruptcy (which usually happens 12 months after bankruptcy).

Can your basic bank account be closed?

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

• Give false or misleading information
• Open another bank account in the UK
• Regularly fail to meet the terms and conditions of the account
• Don’t use your account for more than two years
• Have used the account unlawfully or fraudulently or there are concerns you might use the account in this way.

How do you complain about the service you’ve received?

Mistakes can happen and, if you have a complaint about the service you receive, first contact your bank or building society to give them a chance to sort the problem out. They should look into your complaint and reply within eight weeks.

If you’re not satisfied with the response, you might be able to take your complaint to the Financial Ombudsman to see if they can help.

Discuss this with others

Read and share your experiences on our online forum.

Useful links

Below you will find links to useful websites relating to this page. More specific details (including addresses and telephone numbers) of some of the organisations listed below can be found here.

• Citizens Advice Bureau
• Money Advice Service

More information

1. For practical information – More information can be found in our banking section
2. To discuss this issue with others – Read and share your experiences on our online forum
3. Policy work – Read about the policy work we’re doing on this issue
4. Questions – If you have any questions about this, you can contact our helpline.

Get involved

Help us to add value to this information. You can:

1. Comment on this page (below)
2. Send your feedback directly to us
3. Discuss your views and experiences with others on our online forum