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Three ways a basic bank account could help you

This month a raft of new fee-free bank accounts were launched. We’ve taken a look to see who they could help.

Most people should be able to open a bank account, yet there are times when they can’t. Though some banks have offered simple basic bank accounts to help, some have come with fees for missed payments. To combat this, nine of the big high street banks have followed a government request and created some new fee-free accounts.

  • Barclays – Barclays Basic Current Account
  • Santander – Basic Current Account
  • NatWest – Foundation Account
  • Ulster Bank (Northern Ireland) – Foundation Account
  • The Royal Bank of Scotland (Scotland) – Foundation Account
  • RBS England & Wales – Basic Account
  • HSBC – Basic Bank Account
  • Nationwide – FlexBasic
  • Co-operative Bank – Cashminder
  • Lloyds Banking Group (including Halifax and Bank of Scotland brands) – Basic Account
  • TSB – Cash Account
  • National Australia Bank Group (including Yorkshire Bank and Clydesdale brands) – Readycash Account

These accounts will let users have a debit card, use cash machines and set up Direct Debits and standing orders. Account holders will also be able to have their salary, benefits or pension paid directly into the account and be able to pay in cheques and cash.

So how could you benefit from one of these new accounts?

If you’ve been turned down for a standard bank account

Most of the standard current accounts require a credit check. If you’ve been declared bankrupt or have a county court judgement against you, you won’t be able to open one. Even a bad credit rating could also mean you are rejected.

Basic bank accounts are open to pretty much anyone who doesn't have an account. The minimum age is 16, though some banks might have different requirements

If you’re on Universal Credit

Anyone receiving benefits will be moved onto Universal Credit within the next year. One of the requirements is the money has to be paid into a bank account.

So it’s essential you’ve something set up in order to keep getting paid.

If you’re getting charged for missing payments or going into your overdraft

A move to a basic bank account might help you as there should be no fees for having one. This does however mean you won’t have access to an overdraft. This means you can’t spend more than you have and might help you manage your money better – though you might still be charged by who you owe money for if you miss a payment.

 

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  • danf@gmail.com / 13 May 2016

    This blog is out of date and has several factual errors!

  • ezekiel / 22 April 2016

    Wonderful

  • Roy Hutton / 9 February 2016

    I already have a basic bank account with Barclays bank and they are very helpful to me. They send me text when I need to get some money in to cover direct debits covered but I still struggle when I get my benefits the day after the debits need paying it's unavoidable but the my bank are understandable and help whenever they can.

  • Gregory Charles / 8 February 2016

    Thank you, there is a lot of useful information here, and it will be particularly useful to those that cannot open a current account, especially with the forthcoming change to Universal Credit.

  • Shaun keel / 7 February 2016

    I find this ok. Banks shouldn't charge you anyway. To keep the account open, like they was looking into doing. As for savings, I buy shares & get a dividend. It's better then the interst you get off the banks

  • Michelle Carrington / 7 February 2016

    I found this information really useful. I think I will consider setting up an account so I can save money but have easy access if I need to

  • Barbara / 7 February 2016

    I have a basic bank account and I have no problems with it. No one asking me to buy products I don't need or offering loans I cannot afford. I'm in charge!

  • jessica / 8 January 2016

    i need money for pay a rend can you help my

  • Helena / 7 January 2016

    Some glaring inaccuracies! They are fee-free *basic* bank accounts. Basic bank accounts already exist, they are not new. Fee-free is what's different. Basic bank accounts already allowed payments in and out as well as payment cards. For most you'll have to be aged 18+. Some fees may apply. You can't open a basic bank account if you have or can open a current account without difficulty. I could go on! Badly written information