Opening a bank account in Britain

When opening an account with a bank or a building society, you need to know the following:

main types of accounts and their purpose;

how to open a bank account;

conditions for opening accounts of different types;

how to change the bank.

Types of bank accounts.

We will consider only the main types of bank accounts.

Current bank account.

You can use the current bank account for your daily expenses, that is:

pay the bills;

receive money, such as salary or allowance;

control your budget.

Some current accounts charge interest on the amounts in the account. But much more often this service is provided by saving accounts. A current bank account will allow you to use a checkbook. Also you can get a debit card for use in shops and ATMs. You can exceed the credit. You will have direct debit (direct withdrawn from your account). Some banks allow you to use the card at post for free. Ask at the local post if you can use your current account for free.

Postal account.

You can use this account to receive allowances, benefits and a state pension. Other money can’t be put to the account. You can withdraw money at post using a plastic card and identification number (PIN). You can’t exceed the credit or use the card at the ATM.

Saving account.

This account can be used to save some amounts for the future, unexpected events or major purchases, such as a car or a trip. Your funds will be credited to your account with interest.

Master bank account.

If you have a low income, you have exceeded the credit limit in your current account or you have a bad credit history, it will be difficult for you to open a saving account or a current bank account. But you can open a master bank account. The bank will tell you what requirements you must meet for this. You may be denied if your debt exceeds ?500 or there is a court order about you to pay a certain debt.

As for the master bank account, then you:

do not have to put a certain amount on the account to open it;

do not have to pay anything;

you can receive salaries and allowances in your account;

you can put money on by checks and cash;

you can pay bills by direct debit;

can withdraw money from ATMs.

But the master bank account has some drawbacks:

you will not be able to use your checkbook or exceed your credit limit;

if you use the direct debit service and you do not have enough money in your account, additional funds can be withdrawn from you for this.

Not all master bank accounts are accepted at the post office. If this is important for you, check with the bank before opening an account. If you have a loan or debt on your current account and you open a master bank account with the same bank, the financial institution can withdraw money from your master account to cover your debts.

Joint account.

You can open a joint account with the bank together with other persons. For example, open a joint account with your spouse or partner.

How to open a bank account.

To open an account with a bank, you need to fill in the appropriate form. Sometimes it can be done by phone, but more often - at the bank branch or online. You must provide your full name, date of birth and address. The bank will ask you to produce two separate documents to verify your identity, such as your passport and a recent utility bill. If you do not have such documents, the bank should accept, as a confirmation, a letter from a person who knows you, for example, from a doctor, social worker or an officer, who watches probationers.

The bank may refuse to open an account for you. The bank or the building society is not obliged to explain the reason for the refusal, and, as a rule, nothing can be done about it.

It is very difficult to open an account for certain categories, for example former prisoners. Persons who do not have the right to stay in the UK, for example, those who have entered the country illegally or have expired visa, can’t have an account with the bank or use joint accounts with other persons.

A bank does not have the right to discriminate against you in connection with your gender, race, religion or disability. However, the bank can discriminate against you by age, because some types of accounts can be only opened for people of a certain age.

Conditions of a contract.

Opening an account with a bank or a building society, you sign a contract with him. Terms of the contract vary depending on the bank and the type of your account. You should be informed of all conditions before signing of the contract and notified about all changes made to the terms of the contract while using the bank account.

Terms of the contract when opening a current account, a master account and a savings account with direct access.

If you open a current account, a main account or a direct-accessed savings account, you must provide such information:

details of all expenses;

how the bank will inform you of the activity on your account;

what are the spending limits;

what to do if something goes wrong.

Information should be provided to you in an understandable form. On all the changes, the bank or the building society should inform you in advance. If the terms of the contract have changed, you can close the account at any time within 60 days after informing you of these changes. You do not have to notify the bank in advance or pay for the refusal from banking services.

Terms of the contract when opening a savings account.

If you open a savings account (with the exception of a savings account with direct access), you will receive less detailed information than in other cases. To open some accounts, you need to reach the age of 18.

Changing of bank or building society.

If you decide to change the bank or building society, think about the following:

what amount will have to be paid, for example, for closing an account or for canceling standing orders to the bank;

whether the services of a new bank will be more profitable than those that you use now;

if you decide to close the account, there may be deferrals with payments on standing orders to the bank and direct debiting;

how long you will have to wait until you can use all the services of a new bank.

Open a new account before closing the old one. Cancel all orders to the bank or transfer them to a new account. Return all unused checks or plastic cards (cut to pieces) into your old bank or building society. If you transfer the balance to a new account, leave on the old some funds to cover outstanding checks. If you owe money to the old bank and want to close the account, you will still remain a debtor of the bank, and you can be held accountable for this debt.

The level of services that you can expect from an old bank will depend on whether there is an arrangement between your old and new banks. If there is no agreement, the bank should only help you close the account and return all money, including interest. If there is an agreement, the old bank should transfer your balance and give the new bank instructions on direct debiting and standing orders to the bank. If there are errors or delays that will lead to bank charges, you will not have to pay for them.

Additional Information.

Easy to read information about bank accounts.

Such form of information presentation was invented especially for those people who have difficulty in perceiving information in a different way. To view this information, go here: www.bild.org.uk.

Money Advice Service.

Free independent service Money Advice Service provides different information about bank accounts, including comparative tables of various savings accounts. Its phone number: (0300) 500-50-00, website: www.moneyadviceservice.org.uk. If you need information in the audio form, written in Braille or in large letters, dial (0800) 111-67-68.

Financial Conduct Authority.

Financial Conduct Authority of the United Kingdom - the body responsible for control over banks and building societies. It does not accept individual complaints and does not give financial or legal advice. But if a bank or a building society violates its obligations, FCA can fine them. Phone FCA: (0800) 111-67-68, website: www.fca.org.uk.

Financial Ombudsman Service

If you have applied to a bank or a building society with a complaint, but you have not been helped, you can complain to the Financial Ombudsman Service. You must give the bank at least 8 weeks to resolve your issue, unless you were sent a rejection letter before the expiry of this period. You must complain to the Financial Ombudsman Service within 6 months from the receipt of this letter or the end of the 8-week period, if such letter did not come. Address: Financial Ombudsman Service, Exchange Tower, London, E14 9SR. Phones: (0800) 023-45-67 (calls from the landline are free), (0300) 123-91-23 (from Monday to Friday from 8:00 to 20:00, on Saturday from 9:00 to 13:00). E-mail: [email protected] Website: www.financial-ombudsman.org.uk.

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