Who needs a basic bank account?

27 June2011

Almost everyone needs a bank account, no matter what their financial situation is like. Some people will need a current account, while others will need a savings account. but who actually needs a basic bank account?

Well, basic bank accounts were introduced under a Government scheme to give everyone fair access to banking products - specifically people who wouldn't be able to (and couldn't) access 'normal' bank accounts.

What is a basic bank account?

In simple terms, a basic bank account is exactly what it says it is. It's a bank account offering the basic features you'd expect to have access to when opening an account.

It's similar to a current account, but won't offer some of the features found with current accounts - a cheque book, for example, or an overdraft.

What you will get, however, is a safe place to store your money, a cash/debit card to withdraw money/make purchases with and the facility to set up Direct Debits and standing orders.

Who actually needs a basic bank account?

Anyone can apply for a basic bank account, but this type of bank account is particularly appropriate for people who:

  • Have a poor credit rating . Perhaps because they were unable to repay money they borrowed in the past. They may have subsequently been made bankrupt, for example, or entered a debt management plan or an IVA (Individual Voluntary Arrangement).
    • While your credit rating may get in the way of current account applications, it's unlikely that it will stop you from opening a basic bank account (unless you're an undischarged bankrupt). In fact, if you apply for a thinkbanking account, there's no need for us to check your credit rating at all - even if you are an undischarged bankrupt.
  • Have had their application for a current account turned down . For whatever reason, if you've had your application for a current account turned down, you may need to open a basic bank account instead.
    • At thinkbanking, it doesn't matter if you've had an application rejected in the past. As long as you're over 18, all you need to do is prove your ID and address so we can approve your application.
  • Are worried about overspending on a monthly basis. Basic bank accounts don't tend to come with an overdraft facility, so you cannot accidentally go overdrawn.
    • The thinkbanking account doesn't come with an overdraft facility - our Money Managers will help make sure all your essential costs are covered every month, which means you can spend the remaining money without worrying about going overdrawn or missing important payments.

Note that the thinkbanking account charges a set-up fee of 25 (30 for joint accounts), followed by a monthly management fee of 14.50 (19.50 for joint accounts).

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