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Banking myths busted

Happy Bank Holiday! A time for relaxing (hopefully) and for the banks to close. Which led us to think – what are the myths we hold when it comes to our bank accounts?

Our bank accounts are a big part of how we look after our money but, from overdrafts to managing your current account, there are myths muddying the waters.

Here are three you may have believed and the truth behind them.

1. You can’t have more than one current account

In a word – false. You can have as many current accounts across as many different financial institutions as you like.

There could also be benefits to having more than one bank account.

So, for example, some bank accounts may pay you more interest on your credit balances than others. Or some others may offer incentives for choosing their account – although you should always remember to look beyond any short-term incentives to see whether the account will suit you once the deal is over.

2. You can’t switch bank accounts if you are overdrawn

Again, this isn’t true.

Banks and building societies all now offer a free seven-day Current Account Switch Service.

If you do switch your bank account your balance will be transferred over to your new account. Your overdraft transfer will also be transferred, subject to your credit status and credit history. It’s worth remembering the overdraft limit you’re offered may vary between banks – so do check about the overdraft facility first!

 If you see another bank account that better suits your needs – switch!

3. You need Photo ID to open a bank account

By law, all banks must ask you to provide proof of your identity and address. But that doesn’t need to be Photo ID, so you shouldn’t be put off by the idea you need to provide your passport or driving licence.

Showing ID could mean showing a tenancy agreement with a recent utility bill instead, for example.

Most banks will give you a list of the documents they will accept. Go and talk to the bank you wish to open an account with – they should be able to provide you with a list of alternative documents you can give instead.

It’s probably worth noting that using a non-photo ID usually also requires you to go into the branch – and may not be accepted on postal applications.

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