Basic Bank Accounts

Tink82

Apologies if this is a daft question, but here goes...

I have a current account with HSBC and would like to open a secondary account to piggybank my bills to try and get my finances straightened out.

I don't really want anything fancy or an overdraft, literally want to transfer funds to the account and have my DD's taken from it so I know that everything in my HSBC is for all other spending (I have been paid weekly for years and recently gone to monthly so my DD's are all over the place)

If I went for a basic bank account, would it reflect badly on my credit file in the eyes of other lenders? I understand these are aimed at those with a poor credit history predominantly.

badger09

Tink82 wrote: »

Apologies if this is a daft question, but here goes...

I have a current account with HSBC and would like to open a secondary account to piggybank my bills to try and get my finances straightened out.

I don't really want anything fancy or an overdraft, literally want to transfer funds to the account and have my DD's taken from it so I know that everything in my HSBC is for all other spending (I have been paid weekly for years and recently gone to monthly so my DD's are all over the place)

If I went for a basic bank account, would it reflect badly on my credit file in the eyes of other lenders? I understand these are aimed at those with a poor credit history predominantly.

HSBC will not open a 'basic' account such as you mention because you already have a current account. However, there is nothing to stop you opening a non fee, non interest bearing account with HSBC or anyone else.

If you have only 1 current account, I would suggest opening this new one with a different bank so you always have access to your money in case of bank IT issues

eskbanker

HSBC's basic account specifies "To be eligible, you mustn't already hold a UK bank or payment account" so won't be an option for you, although their standard product, the unimaginatively named Bank Account, might fit the bill.

However, it's often recommended on here to have accounts with multiple banks for resilience, so why not go elsewhere for a bills account?

https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/#cashback has options for accounts that'll pay cashback on bills so in your shoes I'd go with one of these....

Tink82

Thank you both for the advice, I shall widen my search beyond HSBC and take a look at the link you have provided eskbanker! :beer:

penners324

Why not get all your DDs changed so they leave your account the day after you get paid?
You'll need to contact all the DD suppliers but they will move your DD date.

penners324

I'd recommend Starling Bank though. You get an alert the day before the DD is to be paid, a good reminder to get funds to the account. It's also great for spending and cash withdrawals whilst overseas (uses the Mastercard rate with no fees).
Monzo Bank also offer these facilities.

PRAISETHESUN

See here: https://www.moneysavingexpert.com/banking/basic-bank-accounts/

In a nutshell, most banks won't offer you a basic account unless you either specifically ask for it, or if you apply for one of their standard accounts and fail the credit checks. They are meant for people who can't get an account any other way, although plenty of people like them for the fact they are unable to go overdrawn. They are reported to your credit files in the exact same way as every other current account and does not reflect badly in any way.

boo_star

PRAISETHESUN wrote: »

See here: https://www.moneysavingexpert.com/banking/basic-bank-accounts/

In a nutshell, most banks won't offer you a basic account unless you either specifically ask for it, or if you apply for one of their standard accounts and fail the credit checks. They are meant for people who can't get an account any other way, although plenty of people like them for the fact they are unable to go overdrawn. They are reported to your credit files in the exact same way as every other current account and does not reflect badly in any way.

I don't believe that asking for them by name will get you one if you're not eligible (fail to meet the criteria for a standard current account.)

PRAISETHESUN

boo_star wrote: »

I don't believe that asking for them by name will get you one if you're not eligible (fail to meet the criteria for a standard current account.)

When I first moved to the UK I went into a Santander branch and asked specifically for a basic current account as I knew I wasn't going to pass a credit check. That's essentially what they are designed for - people who need access to banking but can't get a regular current account. My application was processed in branch. Now I'm not sure if they first did an application for a standard current account and then offered me the basic account but I just thought I'd share my experience of the process.

The only reason I suggest asking specifically for one is that most branch staff won't mention them as they typically cost the bank money to operate (since there's no potential for overdraft fees, etc). I agree that if you aren't eligible for a basic account then specifically asking for one isn't likely to work, but if you are eligible then it should avoid the bank trying to offer you a standard current account instead when you don't want one.

boo_star

PRAISETHESUN wrote: »

When I first moved to the UK I went into a Santander branch and asked specifically for a basic current account as I knew I wasn't going to pass a credit check. That's essentially what they are designed for - people who need access to banking but can't get a regular current account. My application was processed in branch. Now I'm not sure if they first did an application for a standard current account and then offered me the basic account but I just thought I'd share my experience of the process.

The only reason I suggest asking specifically for one is that most branch staff won't mention them as they typically cost the bank money to operate (since there's no potential for overdraft fees, etc). I agree that if you aren't eligible for a basic account then specifically asking for one isn't likely to work, but if you are eligible then it should avoid the bank trying to offer you a standard current account instead when you don't want one.

I believe the rules changed when they stopped charging fees for bouncing DD's etc.

Basically to avoid everyone opening basic accounts to avoid paying anything.

It's possible if you were obviously going to get knocked back that they'd just go straight to a basic account opening but the OP will almost certainly be excluded from this due to already having a current account.

Generally a bank will go through a full current account application to make sure you aren't eligible before offering a basic account, a far as I understand the process.

System

boo_star wrote: »

I believe the rules changed when they stopped charging fees for bouncing DD's etc.

Basically to avoid everyone opening basic accounts to avoid paying anything.

It's possible if you were obviously going to get knocked back that they'd just go straight to a basic account opening but the OP will almost certainly be excluded from this due to already having a current account.

Generally a bank will go through a full current account application to make sure you aren't eligible before offering a basic account, a far as I understand the process.

If you have a current/basic account elsewhere in the UK then they don't even need to offer you the basic account. Should they subsequently find out, they will generally close the basic account.

I would suggest Starling as it doesn't need a full credit check but (unlike Monzo) you can deposit cash instantly at any Post Office without charge.