Setting Up a Bank Account

Understand Why You Need a Bank Account

A bank account is essential for managing your money. Let’s break this down further:

Why a Bank Account is Useful:

• To Store Money Safely: Instead of keeping cash at home, a bank account ensures your money is secure.

  • Example: If you receive £1,000 in salary or benefits, it’s safe in a bank account and can’t be lost or stolen.

• To Receive Income: A bank account is needed to get paid by employers, benefits agencies, or anyone transferring money to you.

  • Example: The DWP deposits your Universal Credit directly into your bank account.

• To Make Payments: Use your bank account to pay bills, shop online, or use a debit card in shops.

  • Example: You can set up a direct debit to automatically pay your phone bill each month.

Learn About the Different Types of Bank Accounts

There are several types of bank accounts, and each serves a different purpose. Let’s go into more detail:

Current Accounts

This is for everyday spending. It allows you to:

• Get a debit card to pay for things in shops and online.

• Withdraw cash from ATMs.

• Set up direct debits and standing orders to pay bills.

Example Current Account: NatWest Select Account (No monthly fee, and you can use their mobile app to track your spending.)

Savings Accounts

This account is for saving money over time. It:

• Pays you interest on your savings.

• Limits withdrawals to encourage saving.

Example Savings Account: Nationwide Start to Save (You earn interest if you save regularly each month.)

ISAs (Individual Savings Accounts)

ISAs help you save money tax-free.

• Lifetime ISA (LISA): Helps you save for a first home or retirement with a government bonus.

  • Example: For every £100 you save, the government adds £25.

Basic Bank Accounts

For people who may not qualify for other accounts (e.g., if you have a poor credit history).

• No overdrafts, but you can receive payments and pay bills.

Example Basic Account: Barclays Basic Account (Offers a debit card and online banking without extra features like overdrafts.)

Student or Youth Accounts

These accounts are designed for young people or students. They often come with perks.

• Example: HSBC Student Account includes a free railcard.

Decide Which Account is Right for You

This step is about matching your needs to the right account type.

Break It Down:

• What Do You Need the Account For?

  • For everyday spending → Choose a Current Account.

  • To save for the future → Choose a Savings Account or ISA.

• Do You Need Special Features?

• Online or mobile banking?

• A free overdraft?

• A debit card?

Use Comparison Tools:

• MoneyHelper: Compare UK bank accounts at www.moneyhelper.org.uk.

• MoneySavingExpert: Check their guides to find accounts with the best features.

Gather the Documents You’ll Need

You’ll need to show proof of who you are and where you live.

What to Bring:

Proof of Identity (ID):

• Passport, UK driving licence, or a government-issued ID card.

Proof of Address:

• A utility bill (like gas, water, or electricity) or a council tax letter.

• These must show your current address and be dated within the last 3 months.

If you don’t have these, some banks accept alternative documents, like:

• A letter from your GP or support worker.

• A benefits statement.

Choose How to Open Your Account

You can open your account in a way that feels most comfortable for you.

Options:

Online:

• Many banks allow you to apply online through their website or app.

• Example: You can open a Monzo account entirely through their app.

Over the Phone:

• Call the bank’s customer service line.

• Example: Call Lloyds on 0345 300 0000 for help setting up an account.

In-Branch:

• Visit a local branch for face-to-face support.

• Example: Take your documents to a Barclays branch, and they’ll help you fill out the forms.

With Support:

• Ask a trusted friend, family member, or support worker to help.

• Example: They can accompany you to a bank branch or help you navigate an online application.

Set Up Your Account

Once you’ve chosen your bank and account type, follow these steps to set it up.

Steps to Open Your Account:

Complete the Application Form:

• Whether online, over the phone, or in-branch, provide your personal details (name, date of birth, address, etc.).

Submit Your Documents:

• Upload photos of your ID and proof of address if applying online, or bring the originals to a branch.

Activate Your Account:

• Some accounts require a small deposit to activate (e.g., £1).

Set Up Online Banking:

• Register for online or mobile banking to make it easier to manage your account.

Use Your Bank Account Effectively

Once your account is open, start using it to manage your money.

Break It Down:

Set Up Direct Debits or Standing Orders:

• Automate payments for rent, bills, or subscriptions.

Track Your Spending:

• Use your bank’s app to check your balance and spending.

Save Automatically:

• Many banks let you round up purchases to save spare change (e.g., Monzo’s "round-ups").

Seek Help If Needed

If you find the process difficult, don’t hesitate to ask for support.

Who Can Help:

• Bank Staff:

  • Visit or call your bank for guidance.

• Citizens Advice:

  • Get free advice on managing finances. Visit www.Citizensadvice.org.uk.

• National Autistic Society (NAS):

  • Offers tailored advice for managing finances. Visit www.autism.org.uk.

• MoneyHelper:

  • Free government-backed guidance for financial decisions. Visit www.moneyhelper.org.uk.

Example Walkthrough for Opening a Current Account

Scenario: You want a basic current account to receive your salary.

1. Research online and choose NatWest Select Account.

2. Visit a NatWest branch with your passport and a recent council tax bill.

3. A staff member helps you fill out the form.

4. Deposit £10 to activate your account.

5. Download the NatWest app to manage your account.

Final Thoughts

If the process feels overwhelming, remind yourself that it’s okay to take it one step at a time.

• Celebrate small achievements, like choosing your bank or submitting your application.

• Ask for help if you’re unsure—banks are there to support you.

By following this detailed guide, you can confidently set up a bank account that suits your needs, manage your money effectively, and access support if needed.