UK banks

Opening a bank account in the UK

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There are several UK and British banks to choose from with a range of options for those looking to relocate to England, Scotland, Wales or Northern Ireland. Take a look at this guide to find the best bank account for your needs.

To make sure that your money is in the right hands, take a look at the selection of British banks available to ensure you choose one most suited to your needs, whether you may be working, studying, or simply visiting the United Kingdom.

This guide to British banks and opening a bank account in the UK covers topics such as:

UK banks: Currency, coins and notes in the UK

The UK elected not to join the single currency system adopted by many Eurozone countries in 1999, and instead maintained its own currency – pound sterling. The pound has, in the main, remained robust against the euro and dollar, although the Brexit referendum result in June 2016 saw its value drop considerably and hit a three-year low against the euro in October 2016.

British coins and notes are currently undergoing some changes, with new notes being made from polymer to make them more robust and harder to forge. In October 2016, a new GBP 5 note was created, and the old-style note will be going out of circulation in May 2017. The new GBP 10 note will be released in the summer of 2017, with the GBP 20 note to follow by 2020. Coins are changing too, with the Royal Mint issuing a new design GBP 1 coin from March 2017.

In addition to GBP 5, GBP 10 and GBP 20 notes, GBP 50 notes are in circulation, although there has been speculation that these could eventually be withdrawn. When shopping, don’t feel offended if the cashier places your GBP 50 note in a scanner when you hand it over – this is standard practice in many shops as they attempt to crack down on forgeries.

UK bank accounts: Paying by cash in the UK

Cash machines can be found in many locations, most prominently inside and outside of bank branches and in convenience stores. UK cash machines are connected to the ‘Link’ service, which allows customers to use any cash machine, regardless of who they bank with.

Built in cash machines at bank branches allow withdrawals, balance enquiries and in some cases PIN services, where you can change your PIN number using the machine. These machines don’t usually charge for you to withdraw money using a debit card.

The standalone ATMs more commonly found in smaller convenience stores tend to only offer withdrawals and balance enquiries, and many charge a small flat fee for withdrawals, usually in the region of £1.25-1.75.

While most cash machines only allow you to withdraw in pounds, some also give you the option to take out Euros, although this may be subject to a charge or a less advantageous exchange rate than if you used a currency exchange service.

British banks

Debit and credit cards for UK banks

The majority of banks provide Visa Debit cards, which can be used in high-street shops, online and at cash machines. Their main alternative, Debit MasterCards, work the same way.

While they’re less common, some banks provide Maestro or Visa Electron cards. Many banks have phased out Maestro cards in recent years as they offer less protection than Visa or MasterCards and are accepted in fewer locations around the world. Visa Electron cards, meanwhile, don’t have an overdraft facility and the banks that still use them mainly offer them to people opening their first bank accounts.

Credit cards are also usually Visa or MasterCards. Both options offer customers protection when using their card around the world. You’ll usually have to pay a fee to withdraw cash using a credit card, with the exact charge depending on your bank.

Both Visa and MasterCard use an extra layer of verification when customers buy items online. Both Verified by Visa and MasterCard SecureCode are password-based systems, which ask customers for three digits from their password before authorising transactions.

Visa and MasterCards usually come with contactless technology, allowing you to make a payment of up to £30 in a shop or restaurant by tapping your card, without the need to enter your PIN number.

Lost or stolen UK bank account cards

If you lose your bank card, you’ll need to call the emergency number provided by your bank. This 24-hour number should be dedicated exclusively to reporting lost or stolen cards. Once you’ve reported your card as missing, your bank will issue you a new one either through the post or to your bank branch. The phone numbers for some of the biggest banks are as follows:

 

Where can I open a UK bank account?

While there are dozens of banks and lenders, Barclays, HSBC, Lloyds Banking Group, Santander, Standard Chartered, Royal Bank of Scotland are the ‘big six’, while Nationwide is the UK’s biggest building society. 

These banks offer everything from current accounts and credit cards to mortgages, insurance and investment products. Some of the larger banks, such as HSBC, offer services around the world, which could make it easier to transfer your banking from your current provider when moving to the UK.

Alternatively, you can also open an account with an online-only bank such as LeoPay, who offers free multi-currency accounts with IBANs and a secure alternative of mobile banking.

UK bank account

Opening a bank account in the UK

Once you’re in the UK, you can open a bank account at a branch or online. With various incentives available including cashback and interest-free overdrafts, it pays to shop around. You’ll usually need a UK address when applying unless you already bank with an international provider that has UK coverage. Banks usually require you to fill out an application form and undergo a credit check when applying.

Which documents do I need?

Each individual bank will have its own list of required documents. You will need to prove your identity and your address in order to open a bank account in the UK. Most banks are likely to ask for:

> a tenancy agreement/mortgage statements
> a recent utility bill (less than 3 months old)
> a recent credit card or bank statement (one you have received by post, not a print-out)
> a current council tax bill

If you are studying, a bank will also accept a letter from your University, confirming your address on campus.

Can you open an account before I arrive in the UK?

Your home bank might be able to set up an account in the UK for you. Alternatively, most UK banks have 'international accounts' which can be opened online. These were designed with non-residents in mind.

For more information about the steps to take for opening a bank account in the UK click here.

Internet and phone banking

Most banks offer telephone and Internet banking. Telephone banking usually requires you to authenticate your call by giving digits from your password, by answering a security question or by recalling a memorable date or address.

With online banking, some banks provide pin pads that you either use to generate a code to type in on the screen (HSBC/First Direct), while others have card readers you use to authenticate the log-in (Natwest). Other banks (such as Halifax) instead ask for an online banking ID number and digits from your password.

Banks usually use an extra layer of security for some transactions, such as bank transfers. Halifax, for example, will call you on your registered telephone number and give you a prompt to enter a 4-digit code that appears on your Internet banking screen before allowing the payment.

Cheques

With the rise of debit cards and online banking, cheques aren’t particularly common anymore, though some people still use them when sending money through the post as a safer alternative to putting cash in an envelope. If you use cheques regularly, you’ll usually be able to apply for a new chequebook through the online banking service offered by your provider.

Direct Debit

Direct Debit is a common way to pay utility bills, from household bills such as water and gas to leisure expenses such as mobile phone contracts or gym memberships. All banks offer these services, which are backed by the Direct Debit guarantee. Indeed, some utility companies will even offer small discounts to people who choose to pay by Direct Debit.

Online bank account UK

Standing order

Standing orders are a common way of setting up a regular payment for a fixed amount and are usually used for expenses such as rent or mortgage payments or for regular savings accounts. The biggest difference between a direct debit and standing order is that direct debits give authority to the service provider to change the amount they take from you, while standing orders are directions you give to your bank and can only be changed by you.

Offshore banking and an online bank account, UK

It’s possible to open an international bank account in the UK while working overseas. This can be useful in helping you manage your finances while working out your move. Large UK banks generally offer offshore accounts in sterling, euro or dollars, and these are usually held either in the UK, Jersey or Isle of Man. While it is possible to open an account with a small deposit, offshore banking is usually available to international citizens with significant funds to deposit across their accounts.

While offshore banking has a secretive reputation, modern day offshore accounts are managed with high levels of customer protection. While the protection offered by the Financial Conduct Authority on savings in the UK doesn’t apply to offshore accounts, there are other protective measures elsewhere, such as the Guernsey Banking Deposit Compensation Scheme, which protects the first £50,000 deposited per bank, and the Isle of Man’s Depositors Compensation Scheme, which protects up to £50,000 per person.

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