They are a completely no frills version of the standard current accounts on offer in the UK.
These basic accounts offer you an account just to store money in and an ATM card which you can use to draw money from a cashpoint.
How do basic bank accounts work?
Some basic bank accounts come with debit cards that can be used to pay for goods online or in shops. A basic bank account with a debit card will let you pay for things online and some offer contactless payment, making life a lot simpler.
As an alternative, some basic bank accounts come with a cash card. They can be used in a similar way to debit cards, providing you have sufficient funds loaded to cover any purchases. This is a good option if you are looking for a basic account with the flexibility to spend on a card without the worry of overspending.
It is also possible to get a basic bank account with a cheque book in some banks, but you will usually have to pass a credit check to be eligible.
Some accounts also allow you to set up direct debits, so be sure to look for this if it is something you need.
However, basic accounts do not pay any interest on credit and will not come with an overdraft facility. They are generally offered to people with bad credit ratings for this reason.
How to get a basic bank account
You will find that banks rarely mention or advertise their basic current account; this is because they do not make much money from them so it is in their interest to keep their existence quite.
So, when looking for the best deal on a basic account you will not usually get one in a bank unless you ask directly and explain yourself thoroughly.
The exception of course is if you use our basic bank account comparison that lists, and enables you to apply for all the basic bank accounts on offer in the UK. However, just because banks don't make much money from these accounts it does not mean they are completely free.
Most accounts do not charge a monthly fee although some do, especially those with a prepaid card, so take this into consideration.
There is also likely to be large charges on unauthorised transactions. So if a direct debit payment comes out of your account and you don't have the funds to cover it you will be charged. This means that such accounts have to be managed stringently to ensure no such issues come about.
If you have been bankrupt, subject to County Court Judgements or serious defaults, you may struggle to get accepted for standard financial products.
If this is the case and you have been left with a poor credit rating a basic bank account may be your only option.
You must also have some form of photo ID and proof of address to a basic account, but most banks allow you to open a basic bank account online.
Most accounts can also be accessed online, over the phone or through a branch.
Although these accounts are not as versatile as normal current accounts they are still a good choice for people in certain situations and with a little online comparison you could find the best basic bank account to suit your needs.