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Opening a Bank Account in the UK

Information on opening a British bank account - what documents to provide - the credit and debit cards, payment methods, cheques and more. Also a glossary of banking terminology.

In the UK, customers can have accounts in a bank and/or a building society. In practice, there is very little difference between the two and both offer similar services. The main differences are:

Banks are generally listed on the stock market, owned by and run for their shareholders.
Building societies are mutual institutions and are owned by their members. This means that as members of the building society, most savings account holders or those with a mortgage have certain voting rights. As dividends are not paid to shareholders, building societies claim that they can offer cheaper mortgages and higher rates of interest.

Major Retail Banks and Building Societies in the UK

Some of the main banks in the UK are:

There are many building societies throughout the UK. Traditionally, building societies only served clients in their area, but they have now become more flexible, offering their services in other areas as well.

For a comprehensive list of Building Societies in the UK, see the Building Societies Association website

Opening a Bank Account in the United Kingdom

There are many different types of accounts and each bank offers different rates and perks to try to attract customers. One of the most important factors for any potential customer when choosing a bank is to decide what they want from the bank, and what kind of account they need. Accounts can be opened online or at a branch in person.

Documents required

When opening a bank account online or in person, a customer needs to fill in an application form and provide:

Proof of identity; for example, passport or identity card
Proof of address; for example a utilities bill
Proof of student status, if relevant

In some cases a customer might have to deposit money into the account. If an overdraft facility is given, a customer may be subject to a credit check.

It could be difficult to access certain banking services if a person has a poor credit history or any fraud convictions.

Opening an account before arrival in the UK

Some, but not all banks, allow customers to open a bank account before arriving in the UK, for example HSBC and LloydsTSB. Banks that offer this service do require a large initial deposit into the UK account. They may also require an account to be opened in the customer's home country. The same documents are required as above.

Alternatively there are a number of relocation companies that offer services to foreigners coming to the UK to work, for a fee.

Types of UK Bank Accounts

Below is a summary of the different accounts offered in the United Kingdom and the benefits of each type of account:

Standard Current Accounts: Customers receive a cheque-book, cash and debit cards, overdraft facilities, monthly or quarterly bank statements. Internet access and telephone banking facilities are often available. For a monthly fee, some current accounts can provide extras such as roadside assistance or medical support
Simple Cash Accounts: Customers do not get a cheque-book, Internet or overdraft facilities
Savings Accounts: Note that interest on savings is taxed
Accounts for High Earners: Tailor made options and personal banking support
Children's Accounts
Student Accounts: Similar to standard current accounts, students may benefit from interest free overdrafts
Graduate Accounts: Graduates can benefit from lower mortgage rates and cheaper overdraft facilities
Foreign Currency Accounts
Euro Accounts
Special Accounts: These cater for certain religious beliefs

The Banking Guide provides comprehensive information on the different types of bank accounts. It also offers readers a questionnaire to help select what kind of account they need.

For more information on choosing a bank in the UK: Click here

Using a United Kingdom Bank Account

Unless it is a simple cash account, all accounts will come with a cheque-book and debit card. If required, a credit card can also be provided. These documents can be used to make payments or get cash from an ATM machine. Some banks may charge for withdrawals from an ATM network other than the customer's ATM network.

For information on the differences between credit and debit cards, see the Directgov website: Click here

Within the cheque book, there is normally a paying-in slip to make payments in cash or cheques into the account easier.

Bank statements are sent by post, or by e-mail if the customer has opted for the Internet service, either monthly, quarterly or yearly.

Banking services

Most banks provide Internet and telephone banking where transactions can be made online or over the phone. Some banks are Internet only. Some of the major banks also allow foreign currency accounts, which are useful for the frequent traveller.

Bills and regular payments such as rent can be paid automatically from the bank account via a direct debit or standing order, which can be set up online or at the branch.

Money can also be transferred automatically into the account by BACS (Bankers' Automated Clearing Service) transfer, for example a salary or pension.

Banking Hours of Business

In general banks are open Monday to Friday from 09:00-17:00, and in some instances, banks may be open on a Saturday.

Banking Terminology and Useful Links

Banking Terminology Guide

AER	Annual Earning Rates on an investment
APR	Annual Percentage Rate of interest
Bounced cheque	Refers to a cheque that has been written without sufficient funds in the account to pay the beneficiary
Central Clearing Time	Refers to the time it takes for money from a cheque to be paid into the payer's account (generally three days in England and Wales)
Charges	Fees paid to the bank for overdrafts or bounced cheques, for example
Cheque book	A booklet of cheques. Each cheque has the account number, sort code and cheque number
Direct Debit	An authorised amount of money taken from a bank account to pay regular bills
Interest	Amount paid or charge on money over time, expressed as a percentage
Money Transfer	Movement of money from one account to another
Overdraft	This can be authorised or unauthorised and represents a minus figure on the account
Standing order	Regular payment to pay bills, authorised by the account holder