How to get a bank account - if you're unbanked - basic bank accounts

Former_MSE_Wendy

Update Note 20 April: Did you try this and get an account - please reply to this discussion and tell us the story - Martin

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] What’s this all about?[/title]
Up to 1.75m adults in the UK don’t have a current account. This financial exclusion hits people’s ability to find legal work, and pay bills.

In the budget the government is promising to legislate to force banks to give everyone access to an account (election permitting), but the BBA, the banks trade body says, “Everybody can have a bank account if they want one, unless (and this is rare) the law says they can't.”

To stave off past legislation most banks introduced ‘basic bank accounts’ which offer a simplified account, yet we regularly hear of people who go in say ‘I’ve a terrible credit score can I apply for an account’ and are given normal bank account application forms – they’re then rejected and allowed to leave unbanked.

We want to test whether people really can get accounts & help you get one
(if you've applied before then please reply with your experiences but note when it was)

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] What is a basic bank account?[/title]
These are specially designed products for those with poor credit scores. In general they are supposed to be easier to open than a standard account.

It has many of the functions of a standard account but with a few differences, such as: there’s no cheque book; no overdraft, though some have a small buffer; some do not have a debit card; you might not be able to use the counter service in branches, or online or telephone banking facilities; you don’t get credit on positive balances.

Yet reports we've had suggest getting one isn't as easy as it should be, maybe due to problems with identification or bank procedures meaning you get the wrong form.

An good alternative for those in the right area is a Credit Union account, which are now available from 24 credit unions around the UK.

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif] Please take part in the experiment... [/title]
If you don't have a bank account, and are willing, please follow all these steps to help us research the situation (and report it back here later) - if not scroll down to the 'tips for getting an account'.

Step 1 - collect together ID

Banks have to check proof of identity and address for new accounts but there’s no list that says what’s acceptable; it is up to the bank staff to follow guidance given to them, so different staff in different banks may accept different documents.





The best documents to use are:

• UK or EU passport or ID card,
• UK or EU photo driving licence,
• A full old style driving licence,
• A benefit, tax credit or pension entitlement letter,
• A recent utility bill (eg gas, electric, water, council tax, home phone but not mobile phone).

If you have problems with ID check for other ideas on this ID guide by Toynbee Hall. Also being on the electoral role can help.

Step 2 - Go to the bank

Just go to a bank - describe your situation (e.g. I've no bank account, I've a bad credit score, I want to open a bank account etc.) and see what happens.

Note this deliberately avoids using the term basic bank account to see if it's offered to you.

Please then report to us:

• Which bank did you visit?
• How good is your credit rating – Good / Average / Poor / Don’t know
• Were you offered a basic account after your first question?
• Was there any discussion of basic bank accounts?
• Were you given a normal bank account to apply for?
• Did you get the normal bank account (or basic account)
• If you applied for the normal bank account and were rejected did they offer you the basic bank account?
• If you were NOT accepted for the account, did the bank tell you why?
• Any other info that was said to you that may be relevant

Do note, if they give you a form that's not for a basic bank account, and you fill it in, that will be recorded on your credit file and can have a minor impact on it. While it's good for our research - if you're borderline for other products it's not good for you (if you're beyond borderline it probably makes little difference) so think carefully before doing it.

If you do fill out the form - let us know whether you get an account, and if they reject you, do they contact you about basic bank accounts.

If you don't get an account follow the tips below on how to get one.

Tips for getting a basic bank account

If you've tried the experiment or just want the tips - here's the info...

Step 1 - collect together ID

Banks have to check proof of identity and address for new accounts but there’s no list that says what’s acceptable; it is up to the bank staff to follow guidance given to them, so different staff in different banks may accept different documents.





The best documents to use are:

• UK or EU passport or ID card,
• UK or EU photo driving licence,
• A full old style driving licence,
• A benefit, tax credit or pension entitlement letter,
• A recent utility bill (eg gas, electric, water, council tax, home phone but not mobile phone).

If you have problems with ID check for other ideas on this ID guide by Toynbee Hall. Also being on the electoral role can help.

Step 2 - Apply for an account

Go into the bank you would like to apply for account from - see the full list on the Financial Service Authority's website, though anecdotally we hear Co-Op and Barclays tend to be the easiest to get them from, and ask for an account (using the actual product name can help) and say...

“I’d like to apply for a basic bank account - not your normal bank account please - can you give me the right form for that”

Step 3 - Let us know how it went




Reply below with answers to these questions so we can see what’s actually happening:

• Which bank did you visit?
• How good is your credit rating – Good / Average / Poor / Don’t know
• Were you offered a basic account?
• Were you accepted for the account?
• If you were NOT accepted for the account, did the bank tell you why?
• Any other info that was said to you that may be relevant

If you don't want to put your experience on the forum, please send MSE Wendy a PM. All replies are useful and we'd love to hear from as many MoneySavers as possible

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parisp

I am n a huge mess with my finances due to nt being able to get even a Basic bank account.I had my current account closed by Barclays last year for being overdrawn.
Since then i have applied for numerous basic accounts including Natwest step,CO OP Cashminder,A&L,Lloyds,HSBC....
I now have a basic Post Office account
I am such a mess with my car and home insurance as they cancelled the policies due to me not being able to supply dd details.Thus incurring debts for the outstanding loans

I am at my wits end....They say anyone can get a Basic bank account but its not the case.

pmduk

PM sent Wendy. Incidentally in your step 2 I find it helps to ask for the basic bank account by product name. ie. Cashminder for Co-op and Cash Card for Barclays.

Patr100

i don't have a problem with credit. I don't have problem opening numerous savings accounts. I do have a big problem because invarably if I were to appy for a new bank account as I don't have a driver's licence, or a passport and aren't on benefits no banks want me as I can't supply the narrow range of documents and they have no discretion. This really !!!!es me off.

UK or EU passport or ID card,
UK or EU photo driving licence,
A full old style driving licence,
A benefit, tax credit or pension entitlement letter,

Note, in my experience, a utility bill is never acceptable for ID purposes only for confirming an address, which is useless if the first hurdle can't be overcome.

calebdylan

before getting started you need to know the types of accounts so that you can choose one which suits better for you some banks are offering dual mode accounts where the interest rate differs.......

tim_wood_2

I got myself into a real mess with my finances and opened up a Basic Bank account with the RBS, in my infinite wisdom i decided to open up a "non credit scoring" account with the Yorkshire Bank who at the time welcomed me with open arms and provided me with a Debit Card which at the time the RBS could not do. However in 2008 i declared myself Bankrupt and once it had all been finalised i spoke to the YB on several occasions and they informed that it wasnt a problem and that my account would remain open. Surprise surprise a few days later I go to use my card and it wasnt authorised despite there being funds in it. When approached they told me that they do not want to deal with bankrupts and even cut my card up in front of me! I then went back to the RBS and explained the situation and they were execellent, they told me that my account was still open and that now they were even offering debit cards with the account.

Trust me i shall never go near the YB again and if anyone else asks me i will tell them the same and i am currently experiencing a great relationship with the RBS :T

coco1277_2

My husband and I have bad credit and have tried to apply for basic bank accounts at Barclays and co-op but declined and no reason given , thankfully I do have an old lloyds basic account which I am using for my wages and husbands . If I didnt have this account though we would be in deep trouble as woudnt have any way of receiving wages and child ben and paying bills , Its ridiculous its not like a basic account has any credit facilities or anything , I dont understand how some people cant even get a basic account .

C3P0_2

I recently had my basic bank account with the co-op closed because of a slight confusion with dates over the christmas period, thus leading me to be overdrawn, the money was paid back but they stopped my card and DD.

Since then I have been trying to apply for another basic account. RBS lost my documents and asked me to go back in and reapply, this did not fill me with confidence so I have not been back! Barclays didnt even contact me and I had to go into branch (on the phone they had no idea what I was talking about). I was told that the procedure had changed and I would have to start again, thanks for letting my know.

I have now just applied for a NatWest Step account, I will let everyone know the outcome of this. But in my experience opening a basic account is not as easy as it should be, you are pushed into applying for standard current accouncts that require a credit check, if you have a bad credit score you probably wont get one and a search will be left on your file, thus devaluing credit further.

Happy to try the process above and see what happens

FedupfromLincoln

We entered into an Iva in early part of last year and were able to open a Natwest Step account before it went through. However in September I tried to open another step account but the bank wouldn't let me as a result of the credit check they ran. They do offer a savings account though that enables you to pay direct debits.

Plaitey

I got into financial trouble in 2008 and needed to move from my HSBC current account to a basic bank account. Even though I was under a DMP with Payplan I was able to open an account with the Yorkshire Bank. I must say that they have been really good and treated me like a normal person. I had some fraudulent activity on my account and they were extremely good as resolving this and issuing me with a new card. If you are in financial difficulties the best piece of advice I got was open a basic bank account with a bank who is not one of your creditors. The FSA has a list of basic bank account available by the banks as a download on their moneymadeclear website.

p24hrsmith

In 2003 I was made bankrupt which meant all my bank accounts were closed. I was advised by the bankruptcy people the best account available at the time was with the Co-op bank and they told me what to ask for. I duly got the account and unlike other basic account they supplied an Electron debit card, although at the time this wasn’t accepted in many places it was better than nothing. All seemed well and as the Electron card became accepted everywhere I stayed with the account until 2008 when I ran into trouble with it.
On a basic bank account you’re not allowed to go overdrawn and your card would be declined (in the past) if you tried to spend more than was in your account. However at some point the Co-op started allowing some companies like supermarkets and in my case BQ to preapproved cards, this is where up to say £100 (varies store to store) payment is accepted WITHOUT any check on your account balance. I had recently paid in a cheque but forgot to take into account the bank holiday when thinking it was clear, the combination of which meant I went overdrawn. The Co-op’s reaction ....7 days notice of bank account closure due to breach of terms. After much arguing over prepproval and that they had not warned me of the change also the fact I was only overdrawn for 10 hours and I clearly didn't do it intentionally they let me keep the account but if I hadn’t of paid in that cheque they would have closed it and who would give me an account then?
As it happens I applied for a normal account with Nationwide and got it so it seems my credit rating has now recovered.