What is the monthly cost of a bank account?
-This depends on the bank, and the type of account you choose. Many banks now have bank accounts with a monthly fee, that offer perks such as travel insurance and discounts on certain purchases. Other accounts are fee-free, but it is important to consider other day to day costs that any bank account may charge, such as overdraft fees, interest on debit balances, and other charges, such as bounced cheques, returned direct debits, etc. Look for a bank account that fits with your lifestyle. For example, if you like to travel abroad frequently, you may want to consider a bank account that offers travel insurance, competitive exchange rates on overseas currencies and low cost or free cash withdrawals abroad. Or if you have significant amount of money and you are a saver, you may want to research high interest current accounts or savings accounts where you could earn more interest on your money.
What does simple interest and compound interest mean?
+For a savings account, simple interest is the interest paid on credit balances, either monthly, quarterly or yearly, depending on the account. Compound interest is interest paid on interest already earned in earlier periods. This means that if you keep money in a savings account for a long time, you can maximise your return, as your interest will start earning interest itself. However, the same is also true for debts, but in reverse, so it is always a good idea to pay off debts as quickly as possible.
Are there advantages to a basic bank account?
+For someone with a poor credit rating, a basic account can help them conduct most of their day to day banking needs when they would usually be turned down for a standard current account. They can also help people who find it challenging to manage their money, basic bank accounts offer no credit facilities or overdraft.
What are the disadvantages of a basic bank account?
+As basic bank accounts have fewer features than a current account and don't offer credit facilities, they can be slightly limiting if you have been used to accessing an overdraft facility, for example. Apart from an overdraft, you won't be offered a chequebook, credit card, or benefits such as cashback, rewards and interest. Later, once you have a better credit rating or an established credit history, you may be able to change your account and have these additional offers.
I have really bad credit and have been bankrupt — can I still get a basic bank account?
+You may still be able to get a basic bank account, it depends on the bank's policies and your situation. If you are unable to get a basic bank account, other alternatives may be available for you to access, such as prepaid card accounts, Post Office card accounts, guaranteed bank accounts (these require you to pay fees), or even managed accounts, where someone else handles the day to day money going into and out of the account.
Why might a bank refuse to open a basic bank account for me?
+This will be down to the bank and its policies. You may be reused if you don't meet their basic criteria, for example you don’t have the residency status required, or you are under age. You can also be refused if a bank is unable to verify your identity or address (you will likely be asked for proof of ID or proof of address). A bank may also refuse to offer you a basic account if you could get another type of account.
Can I get an overdraft with my basic bank account?
+No, basic bank accounts do not normally offer any type of credit including overdraft facilities.