Paying Rent - What type of bank account to open?

rightback50

Hello!

I am about to move into a new flat with 3 friends and the letting agency has asked us to pay the rent from one account and set up a standing order. We would also like to be able to pay our bills from this one account in order to keep everything in one place.

What type of account can we do this with? where is the best place to go? and any other bits of advice about this would be great!

sonastin

Opening up a joint account with friends can be risky. You can find yourself financially linked to them which can cause problems with your credit rating if one of them is a little wayward with their spending habits. You should think carefully about how well you know your friends before you take this step.

There are advantages to doing it though (like bills etc as you have identified) so you shouldn't just discount the idea completely. But make sure you have thought through all the what-ifs and possible problems before you commit.

Pepzofio

Personally, I would nominate one of you to open a basic bank account (no overdraft/chequebook, but allows DDs & SOs) and all deposit money into it each month. You will need to think in advance how you are going to deal with things like bank charges (e.g. if one person's money doesn't go in and it causes a DD to bounce - who pays?) but you would have to do this anyway.

G_M

If you go down the route of nominating one person to open the account into which you all make payments each month to cover rent, bills etc, make sure you have regular meetings and review the statements/bills together.

there was a thread on here some weeks back where a group of students did something similar, and when the year ended and they all left, they found that student A who had been collecting the payments from the others each month had NOT paid the gas, electric, council tax etc, but had vanished on a 'gap-year'! Leaving his ex-mates to settle all the bills which they'd already contributed towards.

Bronnie

[QUOTE=G_M;36654957]If you go down the route of nominating one person to open the account into which you all make payments each month to cover rent, bills etc, make sure you have regular meetings and review the statements/bills together.

there was a thread on here some weeks back where a group of students did something similar, and when the year ended and they all left, they found that student A who had been collecting the payments from the others each month had NOT paid the gas, electric, council tax etc, but had vanished on a 'gap-year'! Leaving his ex-mates to settle all the bills which they'd already contributed towards.[/QUOTE]

I agree it does need very close regular scrutiny. If someone in the group failed to make a payment into the pot it would be the account holder who would bear the responsibility for returned DD's etc and it could ultimately effect that person's credit record adversely.

Pepzofio

Yes, I agree it needs close monitoring. But to be fair, exactly the same applies even if you each take charge of one bill (i.e. one person could easily not pay 'their' bill and everyone gets knobbled at the end) and it's a lot harder to work out who owes what to whom. I would also hope that the housesharers would be having regular meetings to keep on top of bills anyway.

I nearly suggested opening the basic account at a different bank to the nominee's regular bank, so that internet banking could be set up & internet access details provided to other housemates (without access to linked accounts being provided at the same time) so that anyone could review the account at any time, but I wasn't 100% sure if this was a good idea securitywise.

A basic bank account should not really affect the account holder's credit rating, as it does not provide a credit facility. The utility bills etc could still be in multiple names (or another house member's name) so that credit liability is shared more equally - DD can still come out of someone else's account.