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Opening a bank account: What you need to know

Before you open a bank account, it's important to know the different types of accounts available and what you'll need to provide in the application process.
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The most popular bank accounts are:

For example, if you're a student and you're opening your first bank account, a standard current account may be just fine to receive and send money. Or if you're looking to start saving for the future, you might want a savings account go earn interest, or an ISA to make use of the added tax-free savings.

Essentially there are really two different types of bank accounts:

Current account

This is a bank account that lets you manage your money on a day-to-day basis. This includes:

  • receiving money - such as your salary or benefits

  • paying your bills - such as rent, mortgage or council tax

  • keeping track of where your money is going.

Some current accounts can also earn you interest on balance you have in your bank account, though it's likely to be less than most savings accounts.

You will get a debit card, which you can use in shops and with cash machines to make withdrawals.

Savings account

Savings accounts are used to put aside money that you'd like to save for the future. This could be to buy a car, or home, or to have an emergency fund for an unexpected expense.

Savings accounts typically pay you interest on your money. How much interest you earn will depend on your bank and the kind of account you get.

Read our guide for more information about how interest works

While these are the two basic kinds of bank accounts, you can get various types of current accounts and savings accounts that offer different features and benefits.

What are the different types of bank accounts that you can get?

When you're considering what kind of bank account to open, it's useful to keep in mind the potential benefits of different accounts available in the market. This could be in the form of interest, savings rates, overdrafts, and other benefits such as cash back, rewards, and the different fees you might have to pay for using the account.

Here are some of the different kinds of bank accounts that you can choose from:

  • Basic bank accounts. These accounts have limited features and are meant for customers with poor or no credit history.

  • Student accounts. These are designed to help university students, and often come with features like interest-free overdrafts.

  • Standard current accounts. These are normal current accounts with all the standard features

  • Specialised current accounts. These are current accounts with benefits and extra features, such as free travel insurance, that typically come with a fee.

  • Foreign currency accounts. These are accounts that intended for international use.

  • Savings accounts. These bank accounts help you save money and earn interest on your money.

  • ISAs. ISAs allow you to save a certain amount tax-free every year

  • Business bank accounts. These are bank accounts that are designed for running a business.

How do you find the best bank account for your needs?

Once you know the kind of bank account you need, the simplest way to find the best bank account is to compare bank accounts from different providers to get the features you're looking for.

For example, one provider may offer cash back, while another may offer free travel insurance for the same fee.

How do you open a bank account, UK wide?

Opening a bank account is simple. You can choose to open an account in person by visiting the bank branch of your choice, by phone, or online by visiting its website. Most banks now offer online applications, which you can fill out on your own.

You’ll need to provide some basic information as part of the application, which usually includes:

  • Personal information: This includes your full name, nationality, contact details, date of birth, and national insurance number.

  • Proof of identity: You can use your passport or driving licence. Some banks may accept birth certificates for a child or student account.

  • Proof of address: This can be a recent utility bill, mortgage statement or council tax bill that clearly states your name and address. You might also be required to show how long you’ve lived there.

You can make the process easier by making sure you have all these documents on hand, or in a digitised format, if you're applying online.

It's possible the bank may run a credit check to examine your financial history, if you apply for certain kinds of bank accounts. If your application is accepted you'll be notified and receive your debit card and pin in the post – usually in separate deliveries.

You will probably need to activate your card online, by phone or by making a chip and pin purchase.

Can you open on online bank account?

Most new bank accounts these days come with online banking. However, the banking landscape has been changing over the past few years with the arrival of exclusively online bank accounts.

These, digital-only or app-based banks, have no physical branches, but offer online bank accounts that you manage through their smartphone apps. Many of these online bank accounts offer attractive features such as fee free international withdrawals, real-time spending notifications and budgeting tools aimed at helping people manage their money.

It’s important to be aware that not all digital-only banking apps are banks. What this means is that they are not allowed to invest or lend your money to anyone else. The downside of that is these companies aren't part of the Financial Services Compensation Scheme (FSCS), which protects people from losing their money up to £85,000, if a bank goes bust.

New bank accounts are offered all the time, so compare all of the best options to make sure you get the right one for you.

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