Basic bank accounts
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A basic bank account may be a good option if you’ve been turned down for a current account and can act as a first step towards opening a different type of account later on. You can use a basic bank account to receive money and pay bills. Fee-free basic bank accounts were launched in January 2016.
- Fee-free basic bank accounts
- Who can get a basic bank account?
- Who offers fee-free bank accounts?
- How much does a basic bank account cost?
- How to get a basic bank account
- Managing your basic bank account
- If things go wrong
- When you might be refused a basic bank account
- When your basic bank account can be closed
Fee-free basic bank accounts
Fee-free basic bank accounts were launched in January 2016 and are designed for people who:
- Don’t already have a bank account and are ineligible for a standard current account, or
- Can’t use their current bank account due to financial difficulties
If you don’t have access to a standard bank account, a fee-free basic bank account can make it much easier to manage your money. These accounts don’t have an overdraft facility, so you won’t be able to get into debt by spending more than you have.
It’s worth remembering that although these accounts won’t charge you if a Direct Debit or standing order fails, the company the money was supposed to go to might.
Most fee-free basic bank accounts let you:
- Have your wages, salary, benefits, pension or tax credits paid into your account
- Pay cheques in for free (as long as they’re not in foreign currency) – funds are cleared after 6 working days
- Take out money over the counter or from a cashpoint
- Pay your bills by Direct Debit or standing order
- Pay money in at your bank
- Check your account balance over the counter or at a cashpoint
- Some will give you a debit card
Who offers fee-free bank accounts?
The below banks and building societies offer fee-free basic bank accounts:
|Barclays||Barclays Basic Current Account|
|Santander||Basic Current Account|
|Ulster Bank (Northern Ireland)||Foundation Account|
|Royal Bank of Scotland (Scotland)||Foundation Account|
|Royal Bank of Scotland (England & Wales)||Basic Account|
|HSBC||Basic Bank Account|
|Lloyds Banking Group (including Halifax and Bank of Scotland)||Basic Account|
|National Australia Bank Group (including Yorkshire Bank and Clydesdale Bank)||Readycash Account|
Source: HM Treasury
Who can get a basic bank account?
- Over 16. You need to be at least 16 to open a basic bank account, although at some banks the minimum age is 18.
- No need for a good credit history. Because basic bank accounts don’t allow you to go overdrawn, you don’t need to pass a credit check when you open the account.
- Proof of identity and address. All banks will ask for proof of your identity and address before you can open a bank account.
How much does a basic bank account cost?
You should no longer be charged for Direct Debit or standing orders that fail, although you should check this with your bank or building society if you have an existing basic bank account.
Even with a fee-free account, you are likely to be charged for making purchases in a foreign currency or using your account when travelling abroad.
Cash machines (ATMs)
Withdrawing money from a cash machine at a bank or Post Office in the UK is usually free.
Private cash machines, such as those found inside shops, will charge but will ask you to agree the fee before you withdraw your cash.
You may be charged to withdraw cash while abroad.
How to get a basic bank account
How to choose a basic bank account
Basic bank accounts are available from banks while building societies may offer suitable alternative products. You can open one on your own or with someone else (a joint account).
For more information download our handy printable guide to Fee-free basic bank accounts.
Things you might want to check before opening a basic bank account:
- Check you can use cash machines near your home or work for free – ask the bank or building society if you’re not sure.
- Find out if there’s a local branch where you can pay in money and check your account.
- Check if there’s a buffer zone that lets you take out a small amount like £10, even when your account balance is low so you can still get money using a cash machine.
- If you already have an account with the same bank and you owe money on it (for example you’re overdrawn), they may use money in your new account to pay off what you owe on your old account. For this reason, it might make sense to open your new account with a different bank, building society or credit union.
Comparison websites are a good starting point for anyone trying to find a current account tailored to their needs.
We recommend the following websites for comparing current accounts:
- Go Compare – This also allows you to use the government-backed Midata tool to securely upload your past transactions for customised current account recommendations.
- Money Saving Expert
- Money Supermarket
What do I need to open a bank account?
You can usually apply for a basic account in person, by post, over the phone or online.
You will have to provide official proof of identity before you can open a fee-free basic bank account.
You may also have to confirm your address.
An official proof of identity could be a:
- driving licence.
If you don’t have these documents, your bank or building society may accept other documents as proof of identity or address such as an original letter from DWP, HMRC, JobCentre+ or your local council confirming your right to benefits, including Universal Credit.
A letter confirming who you are from your workplace or college.
A letter from a person in authority such as a:
- social landlord
- care home manager
- warden of sheltered accommodation, hostel or refuge
- Armed services officer
- Minister of religion
You may have other documents to prove your identity if you are:
- an international student
- a migrant worker
- a refugee
- an asylum seeker
- a prisoner
- on probation.
If your application is turned down, don’t be afraid to ask why – the bank or building society should be happy to give you a reason for a rejected application.
Managing your basic bank account
Once your basic bank account is open, look for cash machines that are free to use rather than paying to take out your money.
Checking your balance regularly will help you to make sure there’s enough money in your account to cover any standing orders or Direct Debits.
If things go wrong
Mistakes can happen but there are things you and your bank or building society can do to put things right. 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 receive, you may be able to take your complaint to the Financial Ombudsman Service to see if they can help you. Your bank or building society must give you details of this free Ombudsman service when they reply to you.
When you might be refused a basic bank account
Not everyone can open a fee-free basic bank account. Your bank or building society will want to check you qualify before they accept your request.
They may refuse to open a new basic bank account if:
- you could get another account, for example a full-service current account
- you can’t provide proof of your identity
- you refuse a credit check
- they think you will use the account unlawfully or fraudulently
- you are threatening, abusive or violent towards staff.
If your application for a fee-free basic bank account is turned down, you are entitled to ask why. Your bank or building society should tell you the reason why they refused your request unless they suspect you of fraud or money laundering.
If you don’t agree with the decision and think you are entitled to open a basic bank account, you can complain to your bank or building society.
When your basic bank account can be closed
Your bank or building society can close your new basic bank account if you:
- open another bank account in the UK
- regularly fail to meet your bank’s terms and conditions
- don’t use your account for more than two years
- have used the account unlawfully or fraudulently or there are concerns you may use the account in this way
- are threatening, abusive or violent towards staff
- give false or misleading information. Your bank or building society will give you at least two months’ written notice, explaining why they intend to close your account.