Basic Bank Accounts
Top easy-to-open accounts with no fees and no checks
More than one million people in the UK don't have a bank account. Yet basic bank accounts could help them get into the banking system – it's just that banks don't advertise them well.
This is a guide to the best basic bank accounts for people with poor credit who can't get (or don't want) standard bank accounts. As long as you have basic ID, you should be able to get one with a debit card, and the ability to pay direct debits.
In this guide
Get Our Free Money Tips Email!
What is a basic bank account?
There's a tragic problem in the UK with banking exclusion. If you're one of the 1.2 million people who don't have a regular bank account, it can be a nightmare. Yet there is a solution called a 'basic bank account'. Basic bank accounts are products designed for those with poor credit scores.
As the name suggests, a basic bank account offers a place for you to store your money and pay your money from, without overdraft facilities.
Most basic bank accounts will give you a debit card, so you can make payments in shops and online, and all allow you to set up direct debits – which is great, as this can make bills cheaper than paying by cash or cheque.
Are they completely free of charges?
Mostly, yes. Since 1 January 2016, new basic bank accounts have been free of charges for bounced payments for the first time. However, it's still wise to know exactly what money you have in the account, and to manage it carefully as while the bank account won't charge you for unpaid direct debits, for example, you could still get charges from the company that hasn't been paid.
Ten banking groups offer these fee-free accounts: Barclays, the Co-operative Bank, HSBC, Lloyds Banking Group (Bank of Scotland, Halifax and Lloyds), Clydesdale Bank and Yorkshire Bank, Nationwide, RBS Group (NatWest, Royal Bank of Scotland and Ulster Bank), Santander, TSB and Virgin Money.
It's worth noting that, while these banks now offer completely free basic accounts to new customers, some existing account holders are still stuck with older accounts that do charge – so if you've currently got a basic account, double check to see if you're being hit. For more on this see our Basic bank account fees news story.
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.
If you need help managing your money, the Budgeting guide has hints, tips and tricks to see where you're spending and help you cut down.
Why don't banks publicise these accounts?
Although few bank accounts in the UK charge you to use them, 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 setting up your account, for example, and producing and sending your debit card and statements.
So banks don't tell you about these accounts as they don't really want people to have them. Unless you specifically ask for them by name, bank staff may not mention the option. Instead you'll be given the normal account application forms, fail the credit check, and be rejected.
A simple rule change would instantly solve this situation. When you apply for a normal account, if you're rejected due to the credit check, the bank should be forced to offer you its basic account there and then.
Get Our Free Money Tips Email!
Who are basic bank accounts for?
The current account market is extremely competitive. Some big banks throw out free £175 deals just to tempt new customers in (see Best Bank Accounts for the top deals).
But to get those you'll need to pass a credit check – where the bank assesses whether it wants you as a customer.
If you're rejected, there are a lot of different reasons why this might be, so don't assume because one bank doesn't want you, another one won't.
But if you've a poor credit history with serious defaults, CCJs, or bankruptcy, it can be very difficult to 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. Don't worry, 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 the Credit Scores guide.
Are they just for those with bad credit?
Basic bank accounts are particularly designed for people with poor credit scores, who won't pass the credit check for standard bank accounts. Because of this, past credit problems – such as CCJs, defaults, or having been declared bankrupt in the past year – aren't usually a barrier.
You don't 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. 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 before applying if your chosen bank does this.
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.
You'll need some form of identification to open a basic bank account – if you don't have that, you might be rejected. This isn't the bank being difficult, it needs to see certain specific documents to comply with money-laundering regulations.
Most banks will also do credit checks with credit reference agencies, though this is usually to check you are who you say you are – so don't worry if you see a search on your credit file from the bank.
What ID do you need to open a basic bank account?
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 onto Universal Credit)
HMRC tax notification or assessment letter
Banks publish their own lists of acceptable ID so you should check these. You'll also need proof of address.
If you can't provide any of the accepted forms of ID on the list, it's best to contact the bank to explain the situation – it'll be able to tell you if any other ID is acceptable.
Easiest-to-get basic bank accounts
While many banks offer these accounts, the anecdotal feedback we have is that three banks seem to welcome basic bank account customers, and are far more proactive in helping them (see above for full list of banks offering them).
Co-op and Virgin Money say that as long as you have proof of address and pass ID checks, you can get a basic bank account.
The Barclays Basic Account is specifically aimed at people who are financially vulnerable, and it automatically offers a basic account to anyone who passes address and ID checks, but who can't get a standard account because of their credit score – which is something MoneySavingExpert.com has been campaigning for.
It has eligibility criteria, so if you'd be eligible for a standard current account with Barclays you may not be able to get the basic one.
None of the accounts will give an overdraft (Barclays has a £15 buffer). But you'll get a Visa debit card, and you can set up direct debits and standing orders.
Because you can't go overdrawn, you need to make sure you have enough money in the account to meet any payments. There's no fee from the banks for this, though you may face late fees or arrears charges from the company or organisation you were trying to pay.
However, if you try to make these payments too often without funds, there's a possibility these banks could cancel your direct debit facility, or close the account. We've heard of it happening, though we don't think it's common – and the bank should write to you before it does this.
Barclays, Co-op & Virgin Money basic bank account details
|Accepts those with an undischarged bankruptcy|
|Accepts those in an IVA, DMP, DRO or discharged bankruptcy (1)|
|Those with a record of fraud|
|Minimum age||18 (similar accounts exist for 16-17 year olds)||16||18|
|ID required||Proof of address plus one piece of ID||Proof of address plus one piece of ID||Two pieces of ID and three years' address history|
|Credit check needed?||Yes, to confirm identity & check if you're eligible for this account rather a standard account||Yes, but only an 'enquiry' which is only visible on your file to you||Yes, but only a soft credit check to confirm your identity|
|Allows direct debits and standing orders|
|Free access to UK ATMs|
|Visa debit card given|
|In credit interest||Nil||Nil||0.75% AER|
|Unpaid direct debit charge||Nil||Nil||Nil|
|Open it||In branch||In branch/ by post||In branch|
|Operate it||Online/branch/mobile app||Phone/branch/online||Phone/branch/online or at the Post Office|
|(1) When you are made bankrupt, your assets (your possessions, home, income etc) can be used to pay your debts. Bankruptcy usually lasts 12 months and after this time you are discharged, or freed, from your bankruptcy debts.|
Are there alternatives to basic bank accounts?
If you can't get, or don't want, a basic bank account, then there are some other alternatives you can try. However, they're not available to all, and in many cases, they're not cheap.
A couple of credit unions across the UK now offer bank accounts, and most of these allow undischarged bankrupts 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.
Post Office Card Account
If you're in receipt of certain Government benefits, pension or tax credits, and you don't have a bank account for them to be paid into, then you can use a Post Office Card Account.
You'll need to contact the office that pays your benefit as you can't open these accounts directly. You'll need proof of ID and address to get one of these accounts opened for you.
The Post Office Card Account is very basic – you get a card, and your benefits are paid onto that card. You can then use the card to withdraw cash, until the balance runs out. There's no overdraft facility, and you can't spend on the card or set up direct debits to be paid from the account.
There are a few bank accounts out there that don't credit check, so are open to all – many of these come with monthly fees, but they're another option if you don't want any of the basic bank accounts above.
The U Account* is technically a prepaid card, but offers much of the functionality of a bank account including direct debits, standing orders and the ability to pay your income to it.
Anyone over 18 with a UK address can open it, though it costs up to £10 per month, depending on which payment plan you choose – other options are cheaper or free but come with fees for things like direct debits and ATM withdrawals. You can also earn cashback with certain retail partners, and can set up 'Extra Accounts' to help with budgeting.
Your money's not protected under the Financial Services Compensation Scheme (FSCS), but funds are ring-fenced and held in a separate Barclays account operated by Wirecard Card Solutions – so if U Account or Wirecard went bust, you should be able to get your money back. It's only if Barclays went under that your cash might be lost.
Another option is Monese*, another prepaid card that acts like a bank account. Anyone over 18 living in the EEA can open an account by filling in their details and submitting a photo of their ID and a video 'selfie' – you don't have to have a UK address.
Monese offers similar features to the U Account above. There are three account options – Starter has no monthly fee but charges £1 for each ATM withdrawal and 0.35%-3.5% top-up fees.
The Plus option has a flat monthly fee of £4.95, which includes 6 cash withdrawals a month – any more are charged at £1 a pop. It charges 0.35%-2.5% for top-ups. The Premium option has no ATM or top-up fees, but is a hefty £14.95/mth.
Monese holds your cash in a separate account, which is entirely ring-fenced from its own finances. This means if Monese went bust, you should be able to get your money back – though it's not FSCS-protected, and if the ring-fencing bank went under, your money could be lost.
Get Our Free Money Tips Email!