How to open a bank account in the United Kingdom

18.04.16
9 minute read
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Whether you’re thinking of moving to the UK or you’ve arrived there already, at some point you’re going to need a bank account. In the past, opening a bank account was very difficult if you were new to the UK. Thankfully, these days, it has become slightly easier. Here’s how to go about it.

What Documents Do I Need?

In order to open a UK bank account, you will need two documents: one to prove your identity and one to prove your address. This applies both in branch and online. Proving your identity is simple. You just need your passport, driving licence or identity card (if you’re an EU national). You’ll also have to prove your address by providing another document.

Every bank has its own list of what documents are acceptable as proof of address. Broadly speaking, however, these include:

  • a tenancy agreement or mortgage statement;
  • a recent electricity or gas bill (less than 3 months old);
  • a recent (less than 3 months old) bank or credit card statement that’s not printed off the internet; or
  • a current council tax bill.

Of course, if you’re new to the UK, you probably don’t have any of the documents on this list. Luckily, in recent years, banks have become a bit more flexible in terms of what documents they will accept as proof of address.

If you’re in the UK to study, for example, many banks will accept a letter from your University’s admissions office confirming your address.

Many banks will also accept a letter from Jobcentre Plus confirming your National Insurance number or even a letter from your employer, as long as it’s less than three months old. There is also another way. Before you leave for the UK, go to your bank and ask them to change your correspondence address to your UK address. You may also be able to do this via internet banking.

Once you’ve changed your address, ask your bank to send a bank statement to your new address by post, and you’ll have a document that proves your UK address.

Can I Open A Bank Account Before I Arrive In The UK?

Yes, you can. Your home bank may be able to set up an account for you if it has a correspondent banking relationship with a British bank. Many major UK banks also have so-called ‘international’ accounts. These are designed specifically for non-residents, so they’re a great option if you don’t have the documents to prove your UK address. In fact, you can even apply for an international account online. Barclays, Lloyds, HSBC and NatWest all offer international bank accounts.

However, opening a bank account from abroad or an international account may not be the right choice for you. Very often, you will have to make a big initial deposit and commit to paying in a minimum amount of money each month. Some banks will also charge you a monthly fee in addition to these requirements. This can make your bank account expensive to open and run, especially if you still don’t have a job. There may also be other restrictions.

For instance, you may not be able to close the account and switch to a better deal until a set period of time expires.

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Which Bank Is Best For My Needs?

Unfortunately, there is no straightforward answer to this question. The banking industry in the UK is very competitive, and many banks have special products designed to attract specific types of customer.

This is clearly great news. Whether you’re a student, a professional or a business, you’re bound to find something to suit your needs. That said, you will also need to take your personal circumstances into consideration.

Things To Consider When Choosing a Bank

Because you’re new to the UK, you have a limited credit history and not much documentation. Some banks are strict with their requirements, so opening a bank account with them will be difficult.

It’s usually easier to open an account with one of the UK’s largest banks - Barclays, Lloyds, HSBC or RBS/NatWest. These banks have been in business for a long time and are very financially strong. They also have a lot of experience dealing with foreigners, so they are a bit more understanding of your situation and flexible with their requirements.

Your nationality will also play an important role. It’s probably easier to open a bank account if you are an EU national than when you’re from a country outside the EU. Either way, it’s a good idea to get in touch with customer support before you try opening an account. That way, you can get more information and ask questions about any difficulties you may have.

The Big Four UK Banks

There are more than ten retail banks in the UK, each with their own strengths and weaknesses. However, the biggest four UK banks are Barclays, Lloyds, HSBC and RBS/NatWest. Let’s have a look at what each of them have to offer.

Barclays

Barclays is one of the oldest banks in the UK; and has more than 1500 branches around the country. It’s also probably one of the easiest banks to open an account with if you’re new to the UK. In fact, you can even pre-apply for an account online before you arrive in the UK.

The account is free and comes with a contactless visa debit card as standard. However, you won’t be able to use your account immediately. Once you’re in the UK, you have to visit a branch with your reference number, passport and proof of address in order to activate the account. Barclays also has special accounts for students and businesses.

The international student account is free and offers cashback from various shops as well as a dedicated service that helps you build your CV and improve your interview skills. You can also upgrade your basic bank account with student additions. These include a free overdraft of up to £ 3, 000 for three years and a contactless debit card. Barclays’ business account is free for the first year and comes with a choice of financing options, including planned overdraft and credit cards. You can get in touch with customer support via a live chat, where you can discuss the details of your application and ask questions in real time.

Lloyds

Lloyds is the largest provider of current accounts in the UK, and has about 1300 branches throughout the country. Opening a bank account is very easy, even if you have just arrived in the UK.

In fact, Lloyds has a special new to the UK account which you can normally open with just your passport or identity card (if you’re an EU citizen). The account is free and comes with a contactless visa debit card as standard.

Lloyds also has an account especially for students. This has a free overdraft of up to £1,500 for three years and an optional credit card with a minimum limit of £500. You can also open a business account. Depending on the size of your business, there are three accounts to choose from. However, all are free for the first 18 months. You’ll also get a range of business tools, including accounting software and legal assistance at a reduced price.

HSBC

HSBC has more than 1100 branches around England and Wales, but a lower number in Scotland and Northern Ireland. Of course, HSBC’s biggest advantage is that it operates in more than 80 countries around the world. If you bank with HSBC in your home country, they can help you set up an account in the UK before you get here.

The basic current account includes free telephone and internet banking and comes with a visa debit card. However, whether you get a contactless card will depend on your individual circumstances. You may also have to undergo a credit check before opening your account.

With a free overdraft of £3,000 per year for three years and 2% in-credit interest on the first £1,000, HSBC’s student account is one of the best out there.

If you want to open a business account, there is a range of business bank accounts to choose from. All are free for the first 18 months and include perks such as a dedicated relationship manager to help you build your business and a knowledge centre with training articles and videos.

RBS/NatWest

The RBS Group owns the Royal Bank of Scotland and NatWest. Because they’re part of the same group, both the Royal Bank of Scotland and NatWest have broadly similar products. However, most of the Royal Bank of Scotland’s 700 branches are located in Scotland, whilst NatWest has over 1,400 branches all over the UK. NatWest’s Select current account is free to use and comes with a contactless visa debit card as standard. You’ll also get access to an emergency cash service, so you can withdraw money from your account using just a security code if your card is lost or stolen.

NatWest also has excellent student and business accounts. If you’re a student, you will get a free overdraft of up to £2,000 for three years as well as a 33% discount on coach travel with National Express.

NatWest has 4 business accounts to choose from, depending on the size of your business. Even if you’re just starting your business, you’ll get free banking for 2 years, a free business credit card for the first 12 months and a free £500 overdraft for the first year. You can contact customer support via a live chat, where you can discuss the details of your application and ask any questions in real time.

Other Banks Worth Looking Into

While Barclays, Lloyds, HSBC and RBS/NatWest are the four biggest banks in the UK, there are also other banks you can check. TSB is quickly gaining a reputation as one of the best banks in the UK. It’s quite easy to open an account, even if you’re new to the UK; and the Classic Plus account has some great perks. These include 5% interest each month on the first £2,000 in your account and 5% cashback each month on your first £100 contactless payments. The student account has a free overdraft of up to £1,500 for three years.

Santander is very popular because of its 1|2|3| Account. This offers up to 3% cashback on household bills and 3% interest on balances between £3,000 and £20,000. Unfortunately, you’ll need to undergo a credit check when you apply for this account, so if you’re new to the UK you probably won’t qualify. However, once you’ve been in the UK for a while (perhaps a year or so), it’s a good idea to look at it.

Of course, it’s always best to look at what different banks have to offer and see who has the best deal. Don’t commit to a product without at least having a look at what else is out there.

What Are The Costs?

You can get a basic current account at no monthly cost from most high street banks. This should be more than enough for your everyday banking needs.

Most banks also have premium accounts that offer additional benefits such as cashback on household bills, in-credit interest and insurance. However, these accounts will often have monthly fees and minimum eligibility requirements; and you may not qualify if you’re new to the UK. You’ll also need to be careful to stay in credit. Unless you have a planned overdraft facility, your bank may charge large fees if you withdraw more money than you have in your account. It’s always a good idea to read through your bank’s terms and conditions. That way, you’ll avoid any nasty surprises.

ATM Fees

Withdrawing money from an ATM is free if you use one of your bank’s ATM machines. Many banks also offer free cash withdrawals even if you’re not a customer.

However, some ATM machines aren’t free; and can charge you between £1.50 and £3 per transaction. If you’re not using one of your bank’s ATM machines, check the machine first. Many free ATM machines will state that they are free. Similarly, some paid machines will warn you about charges before you can complete the transaction.

Using an ATM outside the UK is never free. Many banks will charge a non-sterling transaction fee, which can be as high as 2.99% per transaction. Some banks will also charge a cash withdrawal fee in addition to the non-sterling transaction fee.

More importantly, if a foreign ATM asks you which currency it should charge you in, always choose to be charged in the local currency. If you don’t, you’ll get an unfavourable exchange rate plus the fees charged by your UK bank.

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