What is a basic bank account?

21 June2011

Having a bank account is very important - without one, you wouldn't have access to some of the most important financial features of modern-day life, like somewhere safe to keep your money, for example, or a cash card, or access to Direct Debit facilities.

As you may be aware, however, different types of bank account offer different features - and some will be suitable for some people, but not for others.

If you've struggled with your finances in the past, for example, or you've simply had little or no banking experience, you might find that a basic bank account is the right account for you.

What is a basic bank account?

Basic bank accounts are, essentially, 'simplified' current accounts that offer the 'basic' features you'd expect with a bank account.

That includes:

  • Somewhere to store your money (wages, etc.)
  • A cash or debit card to make payments/withdraw money with
  • The facility to set up standing orders and Direct Debits

Some basic bank accounts may offer more than this. and the thinkbanking account certainly does.

One thing the thinkbanking account gives you is access to our dedicated Money Managers, a team of dedicated experts who'll help make sure all the essential costs you've told us about are covered every month. That way, when you spend your 'spare' money, you know that it really is spare - that it's not money you should be keeping for things like your mortgage/rent payment.

There's a set-up fee and a monthly management fee (25 and 14.50), so you'd need to consider if it's worth it for you. You'd need to consider how much you've been charged in unexpected fees for things like going overdrawn or bounced payments in the past.

Who would a basic bank account be right for?

In general, basic bank accounts would be appropriate for people who have experienced financial difficulties in the past (and have a bad credit rating as a result) and for people who have little or no banking experience - but would like a simple account to help them manage their day-to-day finances.

Basic bank accounts are open to plenty of people who wouldn't be approved for a 'normal' current account, but they're not limited to that group.

Because basic bank accounts don't allow their users to go overdrawn (they tend not to have an overdraft facility), they can be useful for people who are worried about spending too much each month.

Some basic bank accounts won't involve credit checks either, so they're also suitable for people who are worried they won't pass their bank's current account credit check.

If you think a basic bank account may be right for you, or you'd like to find out more about this type of bank account, you should speak to a banking adviser.

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