Basic bank account

lyn_d_j

I've banked with Halifax for more years than I can remember. I will be receiving a redundancy payment soon and have read that it's best to have this money paid into an account other than one where I owe money. I intend to pay off my arranged overdraft and also make a payment toward my credit card (also with Halifax). So a couple of questions - could Halifax take all of the money I owe on my credit card from my redundancy pay? If there's a chance of that, I really do it to be paid into another bank account. And also, will I be accepted for a Basic bank account with another bank whilst I still have my Halifax current account?

eskbanker

Banks don't have any rights to unilaterally use funds in a current account to pay off a credit card that's being managed in accordance with the agreement, i.e. making at least minimum contractual monthly repayments and not in default, so you can pay your lump sum into Halifax without worrying about that.

There's nothing stopping you from opening another account elsewhere if you choose to do so, and having money in different institutions is often recommended for resilience, but you'd normally apply for a standard current account and then they might offer a basic one if they don't like the look of your credit files (or might refuse an application altogether).

xylophone

Open a savings account  with on line access and ask for the payment to be made into that?
You can then move money from the savings account to the Halifax.

elle_may

lyn_d_j said:

I've banked with Halifax for more years than I can remember. I will be receiving a redundancy payment soon and have read that it's best to have this money paid into an account other than one where I owe money. I intend to pay off my arranged overdraft and also make a payment toward my credit card (also with Halifax). So a couple of questions - could Halifax take all of the money I owe on my credit card from my redundancy pay? If there's a chance of that, I really do it to be paid into another bank account. And also, will I be accepted for a Basic bank account with another bank whilst I still have my Halifax current account?

To answer your question, my son banks with Halifax and  opened a basic account with Barclays. You can have a debit card with no frills or a cash card. 

colsten

You can apply for a current account with any bank you like. If you don't pass their criteria for a full current account, most will offer you a basic account. If you do actually want a basic account, one provider that lets you apply directly for their basic account is Nationwide

If you want an account that pays interest, you could try Virgin Money and/or TSB. The maximum amount they pay interest on are £1,000 and £1,500 respectively. You can apply for both of them if you like.

TSB are still offering £50 cashback for opening their TSB Plus account, provided you meet the requirements for the cashback.

PRAISETHESUN

lyn_d_j said:

I've banked with Halifax for more years than I can remember. I will be receiving a redundancy payment soon and have read that it's best to have this money paid into an account other than one where I owe money. I intend to pay off my arranged overdraft and also make a payment toward my credit card (also with Halifax). So a couple of questions - could Halifax take all of the money I owe on my credit card from my redundancy pay? If there's a chance of that, I really do it to be paid into another bank account. And also, will I be accepted for a Basic bank account with another bank whilst I still have my Halifax current account?

The way you've written your post to me suggests that you are worried that Halifax will use your redundancy payment to "set off" an existing debt - they are within their rights to do this, but if doing so will cause financial hardship then I believe they can be persuaded not to. If that is the case then it would be prudent to deposit your money with another bank so you can control the terms on which the money is repaid. 

As for the basic account question it'll come down to the particular bank that you want to open a basic account with. Many banks will offer you a basic account only if you apply for their regular account and are not accepted, whilst others will flat out refuse if you hold any current account at all.