Best basic bank accounts

The largest UK banks and building societies launched new fee-free basic bank accounts in January 2016, bringing an end to high charges for those excluded from the mainstream banking system. 

We've ranked the best basic current accounts by bank customer satisfaction as voted by the general public.  

The new basic bank accounts at a glance:

• Fees for failed payments have been scrapped
• Overdraft facilities are not available
• Providers must offer you a debit card to withdraw cash and make payments in stores and online
• They must also let you set up direct debits and standing orders
• You can deposit money and withdraw cash over the counter at any Post Office or bank branch, on the same terms as other personal current account customers
• Banks will review their basic accounts and may move you on to a more appropriate current account if your financial circumstances change (they must give at least two months written notice)

Provider	Min age	ATM limit	Opening the account	Mobile banking	Android Pay	Apple Pay	Customer score
Nationwide FlexBasic	18	£500	Online, branch, phone				80%
More info Nationwide customers can earn cashback via 'Simply Rewards'.
Co-op Bank Cashminder	16	£250	Branch, post				71%
More info Co-op Bank customers can download an application form online, or request a paper form over the phone, to send by post.
TSB Cash Account	18	£200	Online, branch				69%
Santander Basic	16	£300	Online, branch, phone				67%
Virgin Money Essential	18	£250	Branch only				67%
More info Virgin Money Essential pays 0.75% interest on credit balances from £1 to £100,000. Manage via Virgin Money Stores and Post Office, with limited online services.
Bank of Scotland Basic	18	£500	Online, branch, phone				66%
Yorkshire Bank ReadyCash	16	£350	Online, branch, phone, post				65%
Halifax Basic	18	£500	Online, branch, phone				65%
Lloyds Bank Basic	18	£500	Online, branch, phone				64%
Barclays Basic	18	£300	Branch only				63%
NatWest Foundation	18	£300	Online, branch, phone, post				63%
Clydesdale Bank ReadyCash	16	£350	Online, branch, phone, post				62%
HSBC Basic	16	£300	Online, branch, post				60%
More info HSBC Basic not available as a joint account.
Ulster Bank Foundation	18	£300	Online, branch, phone, post				59%
RBS Foundation	18	£300	Branch, phone, post				57%

What is a basic bank account?

Basic bank accounts are designed for people who don’t qualify for other types of current account because they have a poor credit history. 

They offer basic facilities for receiving money and settling bills, without overdraft facilities. 

They can be a lifeline for people who have faced financial difficulties in the past but, because they aren’t as profitable as other accounts, banks and building societies haven’t done a good job of advertising them. 

Can I open a basic bank account if I'm bankrupt? 

Yes – all of the providers in our table told Which? they will accept applicants with an undischarged bankruptcy. This is someone who is still going through the process of a bankruptcy order. 

You can apply for a basic bank account even if you had previous credit problems such as CCJs, or you have insolvency measure in place such as a Debt Management Plan (DMP), Individual Voluntary Arrangement (IVA), or Debt Relief Order (DRO). 

How do I open a basic bank account?

You need to be18 years old to open most basic bank accounts, although the minimum age is just 16 at Co-op Bank, Clydesdale Bank and Yorkshire Bank, HSBC and  Santander. 

Check our table to see if your chosen account can be opened by post, over the phone or online. A few providers only accept applications in person (Virgin Money and Barclays). 

You'll need to provide proof of identity, such as a passport or driving licence. If you don't have either of these, the bank might accept an alternative such as an original copy of a letter from your local council. 

What are the new rules for basic bank accounts?

Barclays, Clydesdale Bank and Yorkshire Bank, the Co-operative Bank, HSBC, Lloyds Banking Group (Bank of Scotland, Halifax and Lloyds), Nationwide Building Society, RBS Group (RBS and NatWest), Santander and TSB all launched new deals on 1 January 2016, following an arrangement with the Treasury back in December 2014. 

Previously, these accounts came with charges of between £6 and £35 if a direct debit or standing order payment bounced. Some providers even let these charges accumulate uncapped, pushing customers further into debt.

All of the major providers have now removed these fees entirely. Account holders also qualify for a debit card, rather than just a basic cash card, which can be used at ATMs and online.

These new accounts are available to anyone who doesn't already have a bank account, is ineligible for a standard current account, or who can't use their existing account due to financial difficulty. 

If you're an existing customer, ask your bank or building society whether you are now eligible for one of these new basic bank accounts.

Are basic bank accounts always free?

No – while you should no longer be charged for failed payments, you will still pay fees if you want to use your debit card abroad. 

You will also pay between £25 to £30 if you want to make a payment via CHAPS (the system used for same-day payments with no transaction limit e.g. when buying property). Nationwide FlexBasic is the only account in our table that doesn't charge a fee for this. 

What is the Post Office Card Account?

If all you want is an account to receive your pension and benefits, the Post Office Card Account is an alternative to a basic bank account. 

There are no credit checks to open one, but you’ll need to contact the government department that pays your pension, benefits or tax credits and ask them to set you up. 

You will get a card to withdraw cash and check your balance at your local Post Office branch. But, as well as no overdraft facility, you can't set up any direct debits or use your card in shops/online. 

What are credit union current accounts?

Credit unions mainly offer savings and loans to their members, but some also offer basic banking services without the need for a credit check.

The 'Engage' account is the most high profile example, offered by various credit unions across the UK. 

The downside is the monthly management fee, for example, Kent Savers charges £2 per month and Lewisham Plus charges £5.95 per month, but the account does allow you to make payments via direct debit and use the Visa prepaid debit card anywhere you see the Visa logo. 

There's no overdraft facility, however, you could be charged 75p for ATM withdrawals. Participating retailers will let you pay for goods and get up to £50 cashback for free. 

To find your local credit union, visit www.findyourcreditunion.co.uk or call the Association of British Credit Unions (Abcul) on 0161 832 3694.