Setting up a bank account in the United Kingdom is fairly straightforward and can be done in person, by phone or on the internet. Regulations do mean that banks will need to see proof of identity before any account is activated and this is normally in the form of passport/driving licence and a recent official letter which shows your name and address – a utility bill is acceptable for this.
*Types of bank account
Types of bank account offered to customers are generally dependant upon status. Unemployed applicants will probably not be offered overdraft or credit facilities of any kind. However, UK law states that basic bank accounts should be available to everybody, therefore most people, with the right identification, can open basic banking facilities.
Many banks offer reward and incentive based bank current accounts for small monthly fees – from £10 upwards – which offer a number of excellent insurances and rewards to account holders. These accounts can be very helpful. Some banks also offer small amounts of interest, if the current account is in credit.
It is well worth shopping around for the best current account available, as a good account can offer literally hundreds of pounds in savings over the course of a year.
Once your bank account has been set up, you can expect to receive a bank card and PIN number within 7-10 days. When funds are paid into your account you can begin using your card.
UK banks are beginning to phase out use of cheques and cheque books as direct debit and card payments are more popular. Furthermore, increasingly larger numbers of retail outlets no longer accept cheques as a valid means of payment.
Banks also offer savings accounts and ISAs and a variety of alternative investment options which will run alongside a current account.
* Overdrafts
There is no automatic right to an overdraft facility with a current account and banks are more cautious nowadays with regard to lendings on accounts. Students studying for degrees will generally qualify for overdraft facilities, if they take advantage of the generous new account offers that are made to them.
UK banks do levy charges for overdrawn accounts and failed payments. Bank charges will differ and some banks, such as Alliance & Leicester, have a particularly bad repulation for customer satisfaction with regard to the charges they levy.
* Bank statements
Banks provide monthly statements of account by mail, email or online so that customers can access all payment and credit details.