The basic way to bank

Transcription

1 Opening a bank account Information from City Council on how to open a bank account The basic way to bank

2 Low income, no bank account? There are several reasons why people on a low income choose not to have a bank account: They may have had difficulty opening one or have a poor credit history; a fear of going into debt or increasing an already heavy debt burden; problems with bankruptcy or the desire to keep a tight reign on their finances or perhaps they have no photographic identification. If these problems apply to you then a basic bank account may be just the thing you need. What is a basic bank account? A basic bank account can help you manage your money. With a basic account you can: pay money in, get cash out by card at cash point machines and the post office use the account to pay bills by direct debit and standing order manage your money with internet or telephone banking. Basic bank accounts do not normally allow you to go overdrawn, so if you are paying bills by direct debit or standing order you need to make sure that you have enough money in your account to avoid any charges.

3 What do I need to open a basic bank account? Many banks in will accept: As proof of ID can be a benefit award letter or paper driving licence, if no photographic ID available. As proof of address can be benefit award letter or paper driving licence if not used as proof of ID, a recent utility bill, a recent bank statement from another bank or a letter from the management of a hostel or residential care home. Some of the ways a basic bank account could help you: If you pay your bills by direct debit you could pay less for some things, especially gas, electric or telephone. You will be in a better position to shop around and find the best deal on other financial products if you have a bank account. For example, many insurance companies will only sell to you if you can pay your premiums from a bank account, so you could get cheaper insurance. You can cash cheques for free instead of using a cheque cashing service that is not connected to a bank. The charges for a cheque-cashing service might mean you only get around 20 out of a cheque for 25. A basic bank account can be a first step towards opening a current account later on.

4 I don t have photographic identification Many banks in will accept a recent benefit award letter together with a utility bill dated within the last 3 months as proof of ID. This means that you don t have to worry if you do not have a passport or driving licence. Contact your local branch for an application form and to check their requirements. I don t have a fixed address An address is essential to opening a bank account. It is a legal requirement for the banks to be able to send out statements of account to the account holder at their home address. What if I am renting a room, living in a hostel or in residential care? Some banks will take a benefit award letter, previous bank statement or driving licences as proof of address as long as they have not been used to fulfil the ID requirement. If you are currently living in a hostel or residential care home most banks will accept an official letter confirming your tenancy from the manager of the property. I have a poor credit history Unless you are an undischarged bankrupt or have a history of financial fraud you should have no problems opening a basic bank account. Even bankruptcy does not guarantee an instant refusal as several banks in will allow undischarged bankrupts to open a basic account. Check the table in this leaflet or with your local branch for further information.

5 The Basic Bank account is it for you? A basic bank account is a simple money management account. It gives you access to your money without the danger of falling into debt. Basic accounts do not come with a cheque book or an overdraft facility. However they offer many features that allow you to manage your money simply and more efficiently. Common features Allows you to receive money and pay bills but won t usually let you overdraw by more than 10 if at all. Can be a stepping stone to a full current account. Cash card, Direct Debits Some banks also offer a debit card and payment by standing order. Others offer a linked savings account to help you budget. Who is it suitable for? People who want to make sure they stay in credit. People who might not get through the banks credit checks to open a current account. Where can I get one? See the list overleaf to find out which bank and building societies in offer this type of account. What do I look for? Cash machines how many you can use free of charge. Branches all the banks listed overleaf have at least one branch in, check locations if you need one close to where you live or work. Post Office you can access most basic bank accounts listed in this leaflet from a Post Office branch. Paying bills does the account give you everything you need to pay your bills easily? All accounts offer Direct Debits; some also offer standing orders and a debit card.

6 Bank and Account Name Minimum age to open account Minimum amount to open account Free buffer zone Direct debits and standing orders Charge for unpaid direct debits Charge for unpaid standing orders Debit card (Solo, Electron or Maestro) Internet and Telephone banking If the following apply to you, your application may be declined Abbey Basic Account 16 None No Yes No Undischarged bankrupt, Alliance & Leicester 16 None No DDs only 34 No SO No No Undischarged bankrupt Basic Cash Account Barclays Cash Card 18 None No Yes No Record of Fraud Account Co-operative Bank 16 None No Yes Record of Fraud Cashminder Halifax Easycash 16 None No Yes Record of Fraud HSBC Basic Bank Account Lloyds TSB Cash Account Nationwide Building Society Flexaccount 18 None 10 Yes No No No Undischarged bankrupt, 18 1 No Yes No Undischarged bankrupt, 16 1 No Yes No Record of Fraud Nat West Step Account 16 None No Yes 38 No Undischarged bankrupt, Royal Bank of Scotland Key Account 16 None No Yes Undischarged bankrupt,

7 Abbey 57 Above Bar, Woolston, Shirley and Bitterne Halifax Above Bar, Portswood, Shirley and Bitterne Nationwide Above Bar, Portswood, Shirley and Bitterne Alliance & Leicester 11 Above Bar, Barclays 67 Above bar, High St, London Rd, Bitterne, Shirley, Portswood and Highfield Co-Operative Bank 149 High St, HSBC 165 High St, London Rd, Portswood, Bitterne, Shirley, Woolston and University Lloyds TSB Above Bar, London Rd, High St, Bitterne, Portswood, Shirley, Woolston and University Nat West 12 High St, Ocean Village, London Road, Woolston and Portswood Royal Bank of Scotland 156 High St, College Place

8 This written information is available on request in other formats or languages. Please contact Welfare Rights & Money Advice Unit advice line on for help. The advice line is open Monday - Friday 9.30am pm. Version 1 Designed, printed & produced by City Council