Factsheet: Opening A Bank Account

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As the name suggests a basic bank account offers a place for you to store your money and pay bills from. It has no overdraft facility and does not pay interest.

Most basic bank accounts allow you a debit card so you can make payments in shops and online. All allow you to set up direct debits which may give you a discount on certain bills.

From 1 January 2016 basic bank accounts became free of all charges. However it is still wise to know exactly what money you have in the account and to manage it carefully. While the bank won’t charge you for unpaid direct debits, you could still incur charges from the supplier that you have not paid.

Who can open a basic bank account?

Basic bank accounts are designed for people with poor credit scores who will not pass the credit check for a standard bank account. Past credit problems such as County Court Judgements, loan defaults or having been declared bankrupt in the past year are not usually a barrier.

You do not have to have credit problems to open a basic bank account. If you want an account to help you manage your money and which won’t let you go overdrawn, you can also opt for one. Be specific or the bank might try to encourage to open a standard account.

The only people who cannot have a basic bank account are those with criminal convictions for fraud or people who fail the bank’s identification checks.

You will need identification to open a basic bank account. This is not the bank being difficult, it is required to see specific documents to comply with money-laundering regulations.

Most banks will also do identity checks (but not credit checks) with credit reference agencies to confirm that you are who you say you are, so don’t worry if you see a search on your credit file from the bank.

What identification do you need to open a basic bank account?

If you’re struggling to provide these documents, there may be other forms of ID you can use.

Contact the bank to explain the situation and they will be able to advise you on other acceptable forms of identification.

Easiest-to-get basic bank accounts

While many banks offer these accounts, three banks seem to welcome basic bank account customers and are far more proactive in helping them.

The three accounts which get this thumbs-up are Barclays Cash Card, Co-op Cashminder and Virgin Money’s Essential Current Account (note that the Co-op’s account isn’t available to undischarged bankrupts).

All three banks say that as long as you have proof of address and pass ID checks, you can get a basic bank account.

None of the accounts will give an overdraft (Barclays has a £15 buffer) but you will get a Visa debit card and you can set up direct debits and standing orders.

You can’t go overdrawn, so you need to make sure you have enough money in the account to meet any payments you make.

If you try to make payments too often without having the funds in your account, there is a possibility that these banks could cancel your direct debit facility or close the account.

Barclays, Co-op & Virgin Money basic bank account details