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What Is A Basic Bank Account?

Back to Basics

Approximately one in twelve of us have trouble opening a current account at a bank. When the Government got wind of this they decided it was unacceptable so they insisted that Banks provide service for people who have poor credit histories, are low wage earners, or simply have had financial problems in the past. These are Basic Bank Accounts.

Try getting one

If you go into a Bank on the High Street and talk to a member of staff about a Basic Bank account the chances are they will deny all knowledge of them.

They won’t be lying to you. It appears that many banks, although Government has insisted they all provide Basic Bank Accounts, still do not actually brief their staff on these less profitable accounts. To open a Basic Bank Account you may have to go to different banks until you find one that will accept they actually provide such a facility.

Why Basic?

A basic bank account will provide you with an account that you can pay cheques into and set up direct debits from. It will not however, provide you with any credit facilities such as an overdraft. You will usually be issued with a cash card which you can use to draw money from an automated teller machine (‘hole in the wall’), as long as you have it in your account. You can also use this cash card in shops as a debit card, again assuming you have the money in the account, but with a Basic Bank Account you won’t be issued with a cheque book.


A Basic Bank Account will enable you to cash cheques for free. Some places other than banks that cash cheques charge as much as 20% for doing so. Instantly, you can see that there are advantages in having a bank account!

You can also save money on household bills such as gas and electricity by setting up direct debits as they offer a discount to customers paying through this method.

If you are currently using somebody else’s bank account to have your wages paid into then you will now be able to receive your independence and regain your privacy.

Starting up

Most Basic Bank Accounts can be started with as little as £1.00 – they were created by the Government to be as easy as possible. Your only obstacles will be the banks themselves who see little opportunity for profit in them.

When opening an account you will need several forms of proof of identity such as a driving licence, passport or utility bill. Usually, as long as you are not under bankruptcy proceedings, anyone should be able to open a Basic Bank Account as long as they are over eighteen.

Best Buys

At the time of writing the Coventry Building Society was the only ‘Bank’ offering credit interest on a Basic Bank Account as high as 2.9%. Nationwide offer 0.25% while others, such as NatWest offer just 0.1%.

None of these accounts are going to give you much credit as a Basic Bank Account isn’t designed as a savings account. It is what it says: a basic bank account.

Interestingly, NatWest have called their Basic Bank Account, ‘Step’, which indicates these accounts can be used to make progress up the Banking ladder and your aim should be to get a normal current account, as this will give you greater flexibility.

For people who have had financial difficulties in the past, particularly resulting in a poor credit history, Basic Bank Accounts can offer a chance to redeem that credit history. It need not take very long to improve your financial status in the eyes of the bank to then make you eligible for a current account

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