Access to Bank Accounts

Why having a bank account is important

• Having a bank account is important for a number of reasons:
  Paying bills by direct debit can cost less, even if bills are normally paid on time;
• Some cheque cashing agencies can charge as much as 9% of a cheque’s value, as well as an additional fee for the transaction; and,
• Many employers will only pay wages directly into a bank account.

However, bank accounts may not be suitable for everyone. Charges can be applied if payments are missed, or there is not enough money in an account to cover a payment due.

 
Please remember, information about the different products listed is not an endorsement of any particular bank, or a recommendation about the suitability of products for someone’s specific needs.

Basic bank accounts are the simplest type of accounts available. They are aimed at people who may not be able to access mainstream current accounts, or people who do not want an overdraft facility.

A basic bank account usually allows people to:

• Have their wages or salary, benefits, pensions and tax credits paid directly into their account;
• Pay bills by standing order or direct debit; and,
• Check online statements online.

Basic bank accounts generally don’t offer overdraft facilities or cheque books, and only some banks will offer debit cards with this type of account. Most high street banks offer some form of basic bank account.

In January 2016 nine major bank and building societies launched fee- free basic bank
accounts. These accounts are designed for people who don’t already have a bank account, or can’t use their current account due to financial difficulties.

The banks offering fee free basic accounts are:

• Barclays Bank
• The Cooperative Bank
• HSBC Bank
• Lloyds Banking Group
• Nationwide Building Society
• Natwest Bank
• Royal Bank of Scotland
• Santander Bank
• TSB Bank

Please remember, information about the different products listed is not an endorsement of any particular bank, or a recommendation about the suitability of products for someone’s specific needs.

 Current accounts

Current bank accounts generally offer more facilities than basic bank accounts. This could include things such as cheque books or overdrafts. Some banks may charge customers for these facilities. Banks and building societies offer a range of current accounts.

Jam Jar accounts

 Jam jar’ accounts are a fairly new product. This type of account allows money to be divided into different sub accounts, for example a set amount of money can be transferred to a sub account and used to pay bills, and another folder can be set up to cover travel and groceries and so on. The advantages of a ‘jam jar’ account are that some of the worries linked to managing money are taken away and money set aside to pay priority bills can’t be spent accidentally.

The main drawback of this type of account is they are not widely available yet, and can be expensive. To find out more about this type of account visit:
https://www.moneyadviceservice.org.uk/en/articles/managing-your-money-using-the-jam-jarapproach?utm_campaign=webfeeds

Santander’s Basic Current Account operates in a similar manner to a ‘jam jar’ account, and is fee free. For more information visit Santander’s website.

Post Office accounts

Post Office Card accounts (provided by Bank of Ireland) are useful for people who do not have a bank account but need a way of receiving benefits, pensions or Tax Credits. For more information about Post Office Card accounts, visit: www.postoffice.co.uk/currentaccounts

Pre-paid credit cards

Pre-paid credit cards can be an alternative to a traditional bank account and are a new way to manage money. For more information about pre-paid cards which let you pay in wages, visit: http://moneyfacts.co.uk/compare/credit-cards/pre-paid-cards/

Identification needed to open a bank account

To open a bank or post office account identification is needed to verify an individual's identity and their current UK address. The type of identification accepted may differ between banks.

For queries relating to the support available to promote financial inclusion, contact the Active Inclusion Newcastle Unit at Newcastle City Council:

Email: financial.inclusion@newcastle.gov.uk
Phone: 0191 277 1707