It is important to find the right kind of bank account that suits your needs and circumstances
Also to receive certain benefits now, it is essential that you have a bank account
The Money Advice Service has produced this video to help you choose a bank account
This page will also advise what to do if you have any problems opening a bank account, if you want to switch accounts, and on line banking safety
There are many types of accounts- It is important to find the best kind of bank account that suits your needs and circumstances
A fee-free basic account may be worth considering if you don't have a bank account or can't use or open a standard current account. You can use a fee-free basic bank account to receive money and pay bills, but it doesn't allow you to use an overdraft
You will need to take some form of identificationalong with you to open any type of account
Many accounts allow you to carry out a range of transactions via your computer tablet or smartphone - this is called online banking
Online banking is a very secure and convenient way to access your bank's services. However, you need to be wary of fraudsters trying to gain access to your account. This is usually by trying to dupe you into handing over security information such as your username, passwords or your memorable information
Find out further information on how to find the right bank account via The Money Advice Service website
Current accounts - these are the most popular accounts for managing day to day money. It allows you to:
- Pay bills by Direct Debit or standing order.
- Receive automated payments such as salary, wages or benefits.
- Access to an overdraft, although this will need to be authorized by the bank.
- Pay for things with a debit card and withdraw money from cashpoint machines
Basic Bank accounts are similar to current accounts except that they do not have an overdraft facility and therefore it is not usually possible to get over drawn. Basic bank accounts come with a debit card and you can pay bills with direct debit
Packaged accounts -some current accounts offer extra features for which they charge a fee.
Jam jar accounts- These accounts are sometimes called budgeting accounts or rent accounts and are designed to help you budget.
They let you divide your money into different 'pots' or 'jars'.
You decide how much money goes into each pot by working out how much you need for your bills and how much is left over for spending or saving.
They also allow you to:
- Pay bills by Direct Debit or standing order
- Receive payments such as salary, wages or benefits
One disadvantage of these accounts is that they charge a monthly fee
Post Office Accounts -some people prefer to bank with the post office - they have 3 different types of accounts
Straightforward current account -that offers free everyday banking with no hidden charges
Control Account-an account that protects you from unexpected bank charges and from accidentally going overdrawn .This costs £5 per month
The Post Office cardaccount is made especially for receiving pensions, benefits and tax credit - perfect if you don't have a bank account - key benefits
- No overdraft and no charges
- No credit checks
- Take cash out and check your balance
Credit Union Accounts -Credit unions are independently-run local co-operative organisations that offer loans and saving accounts to people living or working their area. They offer access to, savings accounts, loans, current accounts and payment cards, and budgeting advice. Credit Unions are monitored by the Financial Services Authority.
You will also need to become a member of a credit union and may have to pay a small joining fee.
The amount of interest that Credit Unions can charge on their loans is capped by law; this often makes them a good value alternative to high street lenders. Credit union loans have no hidden charges, no penalties for repaying early and include life insurance for the loan as standard
Bank accounts for students and graduates- Most banks offer a specific student account, usually with an interest-free overdraft up to an agreed amount. Banks often offer attractive accounts to graduates to try to
Frequently asked questions about banking
Is it worth switching your bank account?
If you're unhappy with the service you are getting from your current bank, it's easy to change. Your new bank will do the work for you and there's no need to deal with your old bank.
It's worth checking every year that your bank is offering everything you need. If not, think about switching
It takes just seven working days to switch your account under the Current Account Switch Service
You choose the date you want to switch, and agree this with your new bank. They will arrange to move all your incoming and outgoing payments to your new account
Universal Credit and other benefits
To receive your benefits you'll need a bank or building society account, or an account with an alternative provider like a credit union.
Problems opening a bank account
Some people may be refused permission to open a current account if they have a poor credit rating, haven't been able to build up a credit rating. Some groups of people such as ex-prisoners may find it particularly difficult to open accounts
You could open a basic bank account if you don't have a bank account or can't use or open a standard current account. You can use a fee-free basic account to receive money and pay bills but it doesn't allow you to use an overdraft.
Further information about basic bank accounts can be found via The Money Advice Service website
You will need to take some form of identification along with you to open an account as all banks and building societies need you to show them identification of who you are to prevent money laundering.
Banking safety on line
Online banking is very secure and convenient way to access your bank's services. However, you need to be wary of fraudsters trying to gain access to your account. This is usually by trying to dupe you into handing over security information such as your username, passwords and your memorable information.
If you would like further information, you might find the links below useful: