basic bank accounts

Basic bank accounts

Top easy-to-open accounts with no fees and no overdrafts

If you've a poor credit score, you might have struggled to find a bank account that will accept you. If so, you're not alone – more than one million people in the UK don't have a bank account. Yet there is a solution – a basic bank account. This guide runs you through what they are, what you need to know, and our top-pick accounts. 

Other MSE banking guides...

Best bank accounts: Can you get a 'standard' bank account? 
Packaged bank accounts: £100s of insurance from £13/mth
Cut overdraft charges: How to pay less and pay it off

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What is a basic bank account?

Basic bank accounts are products designed for those with poor credit scores. As the name suggests, these accounts offer a place for you to store your money and pay bills from, though they don't come with overdrafts, or many of the perks that standard bank accounts offer.

You still get all these features with a basic bank account:

✔️ A debit card and free access to UK ATMs (unless the ATM itself charges)
✔️ The ability to set up direct debits and standing orders to pay bills
✔️ Online or phone banking

However, you won't get:

❌ A chequebook
❌ An overdraft
❌ Perks such as cashback or interest

Basic bank account need-to-knows

Before applying for a basic bank account, there are some key points about them you should be aware of...

  • To get a standard bank account you need to pass a credit check – this is where the bank assesses whether it wants you as a customer. Every bank has its own wish list of what's a perfect customer, so if one bank rejects you, don't assume all the others will too.

    The credit check is often not too harsh, but if you've a poor credit history with serious defaults, county court judgments or bankruptcy, it can be very difficult to pass the credit check and get a standard bank account.

    If this is you, it's likely you'll need to open a basic bank account while you sort your credit problems out. While you may still be credit-checked by the bank for a basic bank account (so it may show up on your credit report), it's usually only done to check your identity. Don't worry though, you're not alone – in the UK, there are almost eight million basic bank accounts open.

    If you want to improve your credit rating, or find out more about why banks might reject you for an account, see our Credit Scores guide.

  • You can open a basic bank account in branch, or sometimes online or over the phone, depending on the bank. As well as filling in an application form, you'll be asked to show some ID, and proof of address.

    To confirm who you are, you'll usually need one (original) of the following:

    • Full, current passport
    • Current UK photocard driving licence or UK full paper driving licence
    • Current European Union member state identity card
    • Identity card issued by the Electoral Office for Northern Ireland
    • Benefit entitlement letters, including pensions, disability payments and universal credit (or benefits such as income support and jobseeker's allowance if you've not yet been moved on to universal credit)
    • HM Revenue & Customs tax notification or assessment letter

    Banks publish their own lists of acceptable ID, so you should check these too. Though if in doubt, it's easier to call the bank or visit a branch and ask them what you'll need, and if they're able to accept anything else.

    If you don't have acceptable ID, you might not be able to open the account. But if this happens to you, it's not the bank being difficult – it needs to see certain acceptable ID documents to comply with money-laundering regulations (basically, it needs to check you're not a fraudster and you're opening the account for legitimate purposes).

    Yet two banks have launched pilot schemes to help those who may not be able to fulfil the above requirements, though the schemes will only help those in a couple of specific situations...

    • HSBC – will open accounts for those with no fixed address

      HSBC is working with charities Shelter, Crisis and Refuge (and their networks) to open accounts for people who don't have a fixed address of their own.

      This can be a first step towards claiming benefits and getting into local authority housing schemes, so if someone you know is affected and might benefit, tell them to contact one of the charities above.

      To open an account, you'll need to attend one of the selected HSBC branches with your case worker from the above charities. Bring along any ID or official documentation you have, as it will all help – but if you don't have any at all, your case worker will be able to vouch for your identity in branch. You'll be able to use the charity's address, your safe house address or a PO Box address on the application.

      You can find a full list of the branches taking part on this HSBC page.

    • Halifax – will open accounts for those soon to be released from prison

      Halifax has been working with the Ministry of Justice, the Prison and Probation Service, the Scottish Prison Service and also directly with prisons in a scheme to set up bank accounts for prisoners who are soon to be released.

      The bank account opening process starts before the prisoner is released, the idea being that having a bank account helps them adjust back to life outside the prison walls.
  • Banks can't charge you for the day-to-day running of a basic bank account. For example, you can't be charged for an unpaid direct debit or standing order, or charges for going into your overdraft (you won't have this facility anyway).

    However, it's still wise to know exactly what money you have in the account, and to manage it carefully as you could still get charges if you didn't have the money to pay a bill from the company that hasn't been paid.

    Plus we've heard a few tales of banks cancelling direct debit facilities, or closing accounts where they've had to bounce lots of payments. We don't think it's common, but just something to be aware of. Your bank should write to you before it does this.

    You should also be aware that basic accounts can still charge you for things like using your debit card abroad, and for certain types of special payments from the account, like same-day CHAPS payments (you'll know in advance about the charges for special payments).

    If you need help managing your money, our Budget Planner has hints, tips and tricks to see where you're spending and to help you cut down.

  • Basic bank accounts are designed to help people with poor credit scores, who won't pass the credit check for standard bank accounts. Because of this, past credit problems – such as county court judgments, defaults or having been declared bankrupt in the past year – aren't usually a barrier.

    Yet they're usually open to anyone who wants to open one. They can be useful if you're struggling to, for example, manage your money, and want an account which won't let you go overdrawn. However, some banks only offer basic accounts to people who fail a credit check for their standard accounts, so it may be best to ask whether your chosen bank does this before applying.

    The only people who categorically can't have a basic bank account are people with criminal convictions for fraud (people with other convictions can still apply and be accepted, subject to fulfilling the other account-opening criteria) or people who fail the bank's ID checks.

  • Although few banks in the UK charge you to use their current accounts (for instance, packaged bank accounts), most accounts have overdrafts, which you pay for. These tend to make banks enough money, meaning they can offer 'free' banking to those not in their overdraft (the banks call it a 'cross-subsidy').

    But with basic bank accounts, there's no chance for the bank to make money from you as a customer. Instead it makes a loss, because of the administration costs of, for example, setting up your account, and producing and sending your debit card and statements.

    Often banks don't tell you about these accounts, as they don't really want people to have them – you'll often find them hidden away in the corner of the bank's website, or you'll need to open them in a branch rather than applying online.

    It's best to ask for these accounts by name, to avoid applying for standard current accounts and getting rejected.

    We'd like it to be the case that if you apply for a normal account, and are rejected due to the credit check, the bank should be forced to offer you its basic account there and then. Sadly, that's not the case at the moment. We've our top picks below in this guide, but this is the full list of banks that are required to offer basic accounts:

    • Bank of Scotland
    • Barclays
    • Co-operative Bank
    • Halifax
    • HSBC
    • Lloyds
    • Nationwide
    • NatWest
    • Royal Bank of Scotland
    • Santander
    • TSB
    • Ulster Bank
    • Virgin Money (including Clydesdale and Yorkshire Bank)
  • Provided the money is in a UK-regulated bank or building society account, it's protected under the Financial Services Compensation Scheme, meaning...

    Up to £85,000 per person, per financial institution is guaranteed.

    In basic terms, this means that the money in your current account is safe if the bank were to go bust.

    It does get a bit complex if you have a decent sum saved in other accounts with the same bank or banking group, as the £85,000 applies across all accounts, it's not a limit per account.

    So for the exact rules on the links between institutions (and how it works for joint accounts), see the detailed Are your savings safe? guide.

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Easiest-to-get basic bank accounts

While many banks offer these accounts (and the nine largest banking groups have to), the anecdotal feedback we have is that three banks seem to welcome basic bank account customers, and are far more proactive in helping them.

The accounts which get this thumbs up are Co-op's CashminderSantander's Basic Current Account and the Virgin Money M Account. All three accounts allow you to set up direct debits/standing orders and give you a debit card which means you can withdraw cash from UK ATMs.

You can also set up all three as joint accounts, provided you both qualify. Two of these providers also let you open a basic bank account online. While all of the accounts below run a credit check to confirm your identity when you apply, The Co-operative Bank and Santander only carry out a soft check – this means that only you can see it on your credit report, and it won't affect your ability to get credit in the future.

Below is a summary of the three accounts, so you can decide which is the best fit for you.

Top-pick basic bank accounts

TABLE_CELL_STYLE Co-op Cashminder Santander Basic Current Account Virgin Money M Account
Accepts those with an undischarged bankruptcy

Yes

Yes Yes
Accepts those in an IVA, DMP, DRO or discharged bankruptcy Yes Yes Yes
Accepts those with a record of fraud No No No
Minimum age 16 16 16
Proof of address plus one piece of ID required Yes Yes
Full info
Yes
Credit check to confirm identity? Yes 
'Soft search' so no lender sees this
Yes 
'Soft search' so no lender sees this
Yes
Allows direct debits and standing orders Yes Yes Yes
Free access to UK ATMs Yes Yes Yes
In-credit interest Nil Nil Nil, but has linked saver paying 1%
Unpaid direct debit charge Nil Nil Nil

Open it Online/ branch Online/ branch Online/ Phone/ branch

Operate it Online/ app/ phone/ branch Online/ app/ phone/ branch Online/ app/ phone/ branch

Alternatives to basic bank accounts

If you can't get – or don't want – a basic bank account, there are some alternatives you can try. However, they're not available to all, and in many cases, they're not cheap.

Fee-paying card-based accounts

There are a couple of bank or card-based accounts out there that don't credit check, so are open to all – they're another option if you don't want any of the basic bank accounts above, but they do tend to have some fees to get or use the accounts. Our top picks...

Top card-based accounts

  Cashplus Freedom* Monese*
Type of account Full bank account Prepaid card, but allows transfers and direct debits
Who can open 18+ and UK resident 18+ and EEA resident
Costs

- £9.95 to get the card

- No monthly cost

- 0.3% fee (min £2) to pay in cash (must be done at the Post Office)

'Simple'
- No monthly cost

- £1.5 fee for ATM withdrawals

- 3.5% fee for top-ups

'Classic'
- £5.95/mth

- No withdrawal fees up to £500/mth

- No top-up fees up to £400/mth

'Premium'
- £14.95/mth

- No withdrawal fees up to £1,500/mth

- No top-up fees up to £1,000/mth

Credit check and ID info It will only check to verify your identity. If it can't do this electronically, you may need to provide ID and proof of address. Submit a photo of ID and a video 'selfie'. You don't need a UK address.
FSCS protection £85,000. If Cashplus went bust you'd get your money back up to this limit. None, though your money is ring-fenced in at a different bank. So if Monese went bust, you should be able to get your money back – provided the other bank still exists.

Credit unions

A couple of credit unions across the UK now offer bank accounts, and most of these allow those with undischarged bankruptcy to get them. You'll usually have to pay a monthly fee of £2 to £5 and/or commit to keeping a certain balance in your account to be a member. However, some credit union current accounts offer cashback in certain stores which can offset the fee.

Read the Credit unions guide for more, including to see if there's one local to you.

Want to complain about your bank account?

If your bank has charged you the wrong amount, taken the wrong amount in payment or its service has been atrocious, then you don't have to suffer in silence.

It's always worth trying to call the bank first to see if it can help, but if not, you can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.

Basic bank accounts FAQ

  • Can I be refused a basic bank account?

    Yes, if you don't meet the identification or proof of address requirements needed by the bank they can refuse you. You could also be refused if you've a criminal conviction for fraud.

    If you are refused an account, you've a right to ask the bank why, and if unhappy you could make a formal complaint. If you're still unhappy with the bank's decision, you can take it further to the free Financial Ombudsman Service.

  • Can I switch basic bank accounts using the seven-day switching process?

    Yes you can. Just open a new basic account with the new bank and it'll process the seven-day switch for you. That means they'll move over all your payments going out, coming in and notify your old bank to close the account.

    It'll also move payments meant to go into your old account into the new one, for example, your salary. If something goes wrong, the bots behind the scenes sort it, so for at least three years any money paid into the old account or wrongly earmarked to come out of that account is transferred to the new one. Also, if you're hit with any charges due to an error in the switch, this should be refunded by the new bank.

    Read full info about bank switching and how it works.

  • How do I set up a direct debit or standing order?

    Direct debits are set up by the company you're paying. In most instances, the company will ask for your account details and they'll set up a direct debit for you, often online. However, sometimes they'll send you a direct debit form that you need to fill out and send back. You can't set up a direct debit yourself.

    A standing order is a payment you can set up yourself. You'll do this via your bank, in branch, on the phone or online. To set one up, you'll need the account details you're sending money to and you'll need to put in a set amount you want to send each time (you can change the amount with a day or two's notice).

  • Is internet and mobile banking safe?

    Yes. Banks have security systems in place that ensure fraudsters can't hack into your account, whether you're logged in online or on your phone. But you still need to be careful – never ever send your online/mobile banking information to anyone.

    If you're using a mobile app, make sure you download your bank's official mobile app from your app store and make sure you update the app regularly with any new security features.

    It's also worth keeping your computer up to date with Free Antivirus Software, so you're protected from viruses and spyware.

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