A basic bank account in the UK can be useful for youngsters having their first bank account or for people who have a bad credit rating and cannot get clearance for a normal bank account. Most UK banks offer basic bank accounts but the terms and conditions vary widely and it is worth checking what they offer before choosing.
A basic bank account will allow money to be paid in, such as salaries and cheques, and allow withdrawals and automatic bill payments. But the key criteria for a basic bank account is that there is no overdraft facility, which is a prerequisite for those under bankruptcy or in an Individual Voluntary Arrangement (IVA) to clear their debts. It is also very rare for a basic account to come with a cheque book.
Most banks review and change the terms and conditions of all their accounts regularly, so the information below could change at any time thus it is always worth checking before applying to open a bank account.
Many who take out a basic bank are people who are struggling financially and thus will have periods with not enough money to pay bills on time. As the norm these days is for bills to be on direct debit, there could be times when the bank will refuse to pay a direct debit because of insufficient funds. However, the way the different banks handle this and the charges involved vary by a large amount.
Some banks, such as Northern and HSBC, do not charge for unpaid direct debits on a basic bank account. Charges from others can range from £8 at Barclays to £30 or above from the likes of First Trust, Nationwide, NatWest and Yorkshire.
Another potential pitfall is the three strikes and you’re out rule that some banks operate. Basically, this means if three direct debits are unpaid then the account will be closed. Banks that operate this rule include Co-operative, HSBC, NatWest and Royal Bank of Scotland.
While all the banks will allow direct debits, not all will process standing orders on a basic bank account. Among those who won’t are Alliance & Leicester and First Trust.
SOURCE:
http://personalbudgeting.suite101.com/article.cfm/basic-bank-account
A basic bank account will allow money to be paid in, such as salaries and cheques, and allow withdrawals and automatic bill payments. But the key criteria for a basic bank account is that there is no overdraft facility, which is a prerequisite for those under bankruptcy or in an Individual Voluntary Arrangement (IVA) to clear their debts. It is also very rare for a basic account to come with a cheque book.
Most banks review and change the terms and conditions of all their accounts regularly, so the information below could change at any time thus it is always worth checking before applying to open a bank account.
Many who take out a basic bank are people who are struggling financially and thus will have periods with not enough money to pay bills on time. As the norm these days is for bills to be on direct debit, there could be times when the bank will refuse to pay a direct debit because of insufficient funds. However, the way the different banks handle this and the charges involved vary by a large amount.
Some banks, such as Northern and HSBC, do not charge for unpaid direct debits on a basic bank account. Charges from others can range from £8 at Barclays to £30 or above from the likes of First Trust, Nationwide, NatWest and Yorkshire.
Another potential pitfall is the three strikes and you’re out rule that some banks operate. Basically, this means if three direct debits are unpaid then the account will be closed. Banks that operate this rule include Co-operative, HSBC, NatWest and Royal Bank of Scotland.
While all the banks will allow direct debits, not all will process standing orders on a basic bank account. Among those who won’t are Alliance & Leicester and First Trust.
SOURCE:
http://personalbudgeting.suite101.com/article.cfm/basic-bank-account
0 comments:
Post a Comment