Bank Accounts

Before choosing a bank account, it's a good idea to think about what services you need to meet your day-to-day and long-term financial needs, and to then shop around for the best account that provides the convenience, rewards, and service you need.

Choosing a Bank Account

Remember to choose a bank account that suits your needs. Search the internet to review bank accounts, features and services. A range of websites specialise in comparing bank accounts and banking services.

What to consider when choosing a bank account:

• Convenience – Are the services, access and opening times suitable to my needs?
• Fees, charges and costs – Am I paying the least that I can for the services that I need or may occasionally want. Could I get these services somewhere else for less?
• Added features or benefits - Are these features or benefits useful to me? Could I get them for less elsewhere?

Carefully read all the information about your account – terms, conditions, limitations, and charges in order to avoid any unwanted surprises.

Keep checking your bank account features and services and switch accounts or banks for better deals.
Ensure that you regularly check other bank accounts and switch if there are better features, services and cheaper charges.

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Types of Accounts

The four main types of bank accounts are:

• Current Accounts – Allows direct debts and payments. There are a number of current accounts available, ranging from a basic bank account with no fee and no overdraft facility, to monthly-fee-accounts which offer a range of added value benefits. Choosing the right one for you will depend on how you spend your money, if you require the flexibility of an overdraft facility, and if you regularly make money transfers.
• Jam Jar account – Available through your credit union. You tell the credit union how much money should be placed in each expenditure or savings ‘jar’. Standing orders or direct debits are set up based on your request. You may be charged a fee for using the jam jar service.

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What You Need to Open a Bank or Building Society Account

There is a process to go through in setting up a bank account and your chosen bank or building society will require two sets of documents:

• Proof of address
• Proof of identity

These could be:

• A verified copy of your passport, birth certificate, or driving licence
• Statements from banks and utility companies, which are less than three months old
• Utility bills, less than three months old
• Proof of tenancy or ownership of your home
• A solicitor’s letter confirming a rent agreement or house purchase within the past six months
• A letter from the Department for Work and Pensions.

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Incentives and Rewards

Introductory rewards may only last for a limited period, for example when switching to another bank or opening a new account.

Rewards, usually financial, may be paid regularly or on a specified date, payment, or occasion. These rewards vary and may range from cashback to vouchers.

Some bank accounts offer added-value benefits, such as: Home, car, lifestyle perks, contents or travel insurance, and breakdown cover. These are usually connected to special bank accounts that attract a monthly fee and there may be limitations. Terms and conditions apply.

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Fees and Charges

Fees and charges are usually applied for some services or if you try to spend more money that you have in your account. For example, overdraft fees or when a payment is blocked due to insufficient funds. 

You may also be charged:

• Cash machine (ATM) fees – if you use your card abroad or in some ATM machines in the UK
• Foreign transaction fees – if you access your money or use credit whilst abroad
• Same day bank transfer fees
• One off item fees – You may be charged a fee for some services, such as duplicate statements, or mortgage applications

You can avoid or reduce bank charges by planning and monitoring your spending agains your budget. Read more advice on managing your budget.

Text alerts can be set up through mobile banking to give you notice when you are about to go into an overdraft. You are less likely to incur unarranged overdraft charges if you use a mobile banking app or text alert service.

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Ways to Pay Your Bills and Contacts