If you have a poor credit history and struggle to get accepted for a current bank account, basic bank accounts offer an option to get into the banking system.

There’s no credit check required to open a basic bank account - only ID documents are required to open one. This guide covers all you need to know about basic bank accounts and how to open one.

What is a basic bank account?

Basic bank accounts are designed specifically for those who fail to qualify for a standard current account due to a poor credit history, including those who have undergone bankruptcy or IVAs. These accounts are not offered by all banks, although the nine largest banks in the UK are required to offer them. They are rarely advertised because they don’t turn a profit for the bank, so it is best to do your research when deciding which account to open. Currently the issuers that offer basic current accounts are: Barclays, Co-operative, HSBC, Lloyds Banking Group (including Bank of Scotland and Halifax), Nationwide, NatWest, Santander, TSB, Royal Bank of Scotland, Ulster Bank, and Clydesdale Bank and Yorkshire Bank. 

Virgin Money and Metro Bank also offer a basic bank account, however, they aren’t governed by the same regulations as the largest nine account providers.

Can I open a basic bank account online?

Applying for a basic bank account is a simple process and can be completed either online or in-branch. It is worth noting that if you qualify for a bank’s standard current account, you will most likely not be offered a basic bank account.

To apply for a basic bank account you’ll have to fulfil some eligibility criteria: UK resident, over 16-18 years of age (depending on the account), and provide some form of identification showing your address such as a passport, driving licence, state benefit entitlement letter, recent utility bill or correspondence from HMRC.

Basic bank account applicants do not need to pass a credit check in order to be accepted, but some banks may perform a credit check against your name and address to confirm your identity.

What do basic bank accounts offer?

Basic bank accounts are free to use, and offer traditional banking facilities such as direct debits, standing orders, and either a debit card or a simple cashcard.

You can pay your wages into a basic bank account, pay bills, use your debit card to make purchases both in-store or online, or use your cashcard to withdraw money from an ATM.

Since January 2016 there have been no fees or charges imposed by banks for unpaid direct debits with a basic bank account. However, the recipient of any unpaid direct debit may charge a fee for such a default, so it is always advisable to budget carefully.

What don’t basic accounts offer?

Basic accounts don’t offer an overdraft facility (though some offer a very small buffer), a cheque book, or any interest on any savings you may have.

It is also worth noting that although the use of a basic bank account is free of charge, your bank may charge you for using your card abroad, both at ATMs and using your debit card for foreign transactions.

What should I consider before I apply for a basic bank account?

Although basic accounts offer no-frills banking, there are differences between each provider’s accounts. You should ask yourself a number of questions before applying, to help ensure you get the best basic bank account:

  • Are you likely to need to visit the branch to pay in cash or cheques regularly, or withdraw cash from an ATM? If so, it would make sense to pick a bank that has a branch and/or cashpoint near where you live or work.

  • Are you going to need a debit card with your account, or will a cashcard suffice? It is sensible to check with the banks you are comparing to see what they offer.

  • Are you likely to need to make purchases abroad regularly? If so, given the fees that the banks may charge, it may make more sense to seek out a separate form of payment for such things, such as a travel prepaid card.

  • Would a prepaid current account be more suitable? Prepaid bank accounts are not free, most charge an annual or monthly fee, and there are fees associated with most actions you undertake through your account (ATM withdrawals, purchasing, topping up your card, etc.) However, some of these products do offer the ability to start rebuilding your credit score. So, if repairing your credit rating so that you can get a standard current account is your main priority, a prepaid bank account might be a better choice.

Basic bank account FAQ

Does every bank offer a basic bank account?

No, but the top nine banks do – they include Barclays, Co-operative, HSBC, Lloyds Banking Group (including Bank of Scotland and Halifax), Nationwide, NatWest, Santander, TSB, Royal Bank of Scotland, Ulster Bank, and Clydesdale Bank and Yorkshire Bank.

Do you have to pass a credit check to get a basic bank account?

No. These accounts are specifically designed for people who would struggle to obtain a conventional bank account, either because their credit rating is less than perfect, or because they are new to credit altogether. In fact, banks will not generally offer you a basic bank account unless you would fail to be eligible for their standard current account.

Can I apply online for a basic bank account?

Most of the basic bank account providers accept online applications, as well as in person and sometimes over the phone.

What can I do with a basic bank account?

You will be able to pay money into your account, and pay your bills, either by direct debit or standing order. Most accounts also offer a debit card with a basic bank account, which you can use to make payments either in-store or online. Accounts that don’t offer a debit card generally offer a basic cash card as an alternative, which you can use to take money out of your account via an ATM.

Am I guaranteed to be accepted for a basic bank account?

Before you can open an account, the bank will check whether you are eligible to open a basic account. If you qualify for a standard current account, the bank may refuse to open a basic bank account for you. If your application is refused, you can ask the bank for the reason for the refusal.

What information will I need to complete a basic bank account online application?

You will be required to provide proof of identity and often, proof of address when you apply. For specific details on how to apply, check the website of the individual banks.

Are basic bank accounts completely free?

Yes. There is no charge for the account itself, no charge for direct debits, standing orders, or even (since 2016) a charge for failed payments.

Can I get an overdraft with my basic bank account?

No. Basic bank accounts do not offer an overdraft facility. You can only spend what you have in your account.

Can I use my basic bank account debit card abroad?

Yes, you can use your debit card to purchase items abroad or take money out from an ATM. Be careful, though: there will inevitably be fees involved, either in the form of a foreign transaction fee or a cash withdrawal fee, so check the terms and conditions with your bank before you travel. There may be cheaper ways to spend or take money out abroad, for example with a prepaid travel card.

27 November 2020