Bank Accounts
Why is it Important to Have a Bank Account?
There are various reasons why it is important to have a bank account and most of them involve saving money:
- Having a bank account enables the payment of wages and benefits without having to pay for expensive cheque cashing services
- Having a bank account also enables people to obtain cheaper deals on fuel, insurance and credit
- Basic bank accounts can help to prevent indebtedness as they do not offer overdraft facilities
- A bank account is a safe place to put your money despite the recent banking crisis. The first £50,000 saved per person, per institution is covered by the Financial Services Compensation Scheme under the FSA
How Can You Open a Bank Account?
Many Credit Unions now offer basic banking facilities and are very customer friendly to all their members. It may be worth enquiring to see if your local Credit Union offers basic banking facilities (see Affordable Credit and Savings section of this website).
The majority of high-street banks offer basic bank accounts, though TAKE CARE!! If you open a basic bank account, set up a Direct Debit and do not have the funds to pay it at the time that the money is due to go out then you could be hit hard with bank charges of around £35.[1]
In order to open a bank account you will need to provide the bank with certain information, which usually includes the following:
- Proof of who you are
- Proof of where you live
- Proof of student status (if relevant)
- A completed application form for the account
- In some cases you will be required to pay some money into your account on opening it
If there is an overdraft facility with the bank account then the bank will most likely wish to run a credit check to ensure that the applicant is credit worthy.
Visit the following website for more information on how to open a bank account:
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/BankAccountsAndBankingProducts/DG_10035252[1] Note: this figure is an approximate value and may differ by institution
