Before you start: how to compare bank accounts
Opening a current account is an important financial milestone. They’re not just a home for our salaries and pensions – you can use one to boost your savings, manage a household budget and bundle all of your financial products together.
Picking the right current account will depend on the way you spend and manage your money. Here are some things to think about when comparing accounts:
Does the bank have a good reputation?
Twice a year, we ask the public to rate their banks to reveal the best and worst current account providers for customer service.
Does it have a nearby branch?
Challenger banks Monzo and Starling offer current accounts run entirely from your mobile phone but if face-to-face service is important to you, check that your chosen provider has a branch you can reach. We've mapped over 3,000 branch closures since 2015.
Does it pay interest?
Some current accounts pay better rates than traditional savings accounts. This table outlines the best accounts for in-credit interest.
Do you need an overdraft?
Some overdrafts cost as much as payday loans so if you’re likely to need to borrow money occasionally, compare fees for both arranged overdrafts in our tables.
Are you willing to pay for perks?
Packaged accounts include various products such as travel insurance, mobile phone cover and vehicle breakdown cover, for around £10-£20 per month. We’ve analysed the best and worst value packaged accounts.
Do you want a joint account?
If you want to manage household finances smoothly, a joint bank account is helpful although remember that you are both liable for any debt, regardless of who spends or provides the money.
Opening a bank account online: what do you need?
Banks must always verify who you are and where you live before they can offer you an account so you’ll need to provide:
- proof of identity (typically a passport, driving licence or National identity card, although banks may accept other forms of identification);
- one or two documents as proof of address (a recent utility bill, rental contract, benefits or state pension letter issued within the past 12 months).
How long does it take to open a bank account online?
If you already have a bank account, switching from one provider to another should take no longer than seven working days if you’re using the industry-wide Current Account Switch Service (CASS).
This also guarantees that any payments accidentally paid into your old account will be redirected for three years.
If you're opening an account from scratch, it will depend on the way you open the account.
For example, Santander says successful online applicants will be sent their account details and debit card within 7-10 working days – but if it can confirm your identity over the phone, you’ll be able to open the account immediately.
Do bank account applications affect your credit score?
An overdraft is a form of credit so current accounts will appear on your credit report and successive applications in a short space of time could negatively affect your score.
Even if you don’t have a formal overdraft facility, there are usually ways you can go overdrawn so banks are likely to carry out searches when you apply.
Credit reports don’t include information about your balance but they do show lenders how many accounts you have open and details of any agreed loans, credit cards and overdrafts.
Having an arranged overdraft facility isn’t necessarily a problem – in fact, some lenders will see available but unused overdrafts as a positive so responsible use could improve your score.
Unarranged overdrafts are a different story – borrowing in this way is always harmful to your credit score, as is an overdraft that you aren’t able to clear in full for a long time.
Can the bank refuse to open a bank account for me?
Banks and building societies can’t be forced to open an account for anyone, although they aren’t allowed to discriminate against you because of your race, sex, disability, religion or sexuality.
But, if you're turned down, you should apply for a fee-free basic bank account instead.
The nine largest banks and building societies in the UK have agreed to offer basic bank accounts with no monthly fees to those who:
- no bank account;
- have a bank account elsewhere, but want to change provider;
- have a bank account, but are in financial difficulty and want their bank to open a new, functional account for them.
Find out more: Basic bank accounts compared
Can I open a bank account without a UK address?
Banks are generally very cautious about opening UK accounts for non-residents, due to strict anti-money laundering regulations and ‘know your customer’ checks.
If you live in a country that’s part of the EU or European Economic Area (EEA), several banks will let you open a current account online without a UK address.
This includes Lloyds Bank, which asks for proof of ID and EU address to be sent by post (the original documents, not copies, which will be retuned securely).
Nationwide’s basic account can also be opened online by non-residents, although you must have a face-to-face meeting within two months of receiving an invitation to show your ID in person.
A new app called Monese offers a multi-currency account without asking for a UK address or credit history.
It charges £4.95 a month for its full account, although a free version also exists. You can deposit cash using Post Office branches or PayPoint locations, and use the account to receive a salary, or set-up direct debits.
Importantly, you don’t have access to the Financial Services Compensation Scheme (FSCS) if Monese goes bust.
Find out more: How are your savings protected?
Can I open a UK bank account if I live overseas?
Several banks offer international bank accounts designed for non-residents. Some charge a monthly fee and you might be asked to deposit a large sum of money.
For example, to become a customer of HSBC Expat you need to hold a minimum of £60,000 or currency equivalent in deposits and/or investments with them.
Services are typically provided by the offshore divisions of these banks so check first how your money is protected.
In the case of both Santander and Lloyds Bank, for example, international accounts are covered by the Jersey Bank scheme, which only covers £50,000 (the UK scheme covers £85,000).
Checklist: opening a bank account online
You don’t need to visit a branch to start your application – you can do most of the legwork online, although you may still be asked to pop into branch with some ID once you get the green light.
If you want to open a joint account, some banks will only let you add additional account holders in branch. Others will perform an ID check for both of you online.
Here’s a handy checklist of the information you might be asked to provide:
Check that it’s registered with the Information Commissioner's Office as a data controller.
Closing a bank account
If you decide to close your account, some banks and building societies will ask you to visit one of the branches so that you can return any cards and chequebooks (Clydesdale and Yorkshire Bank, Royal Bank of Scotland, NatWest, Santander), although you may also be able to close your account via online banking (HSBC, Nationwide).
If your account is in credit or overdrawn you'll need to either move that money to another account or add enough funds to clear the overdraft.
You have a right to your transaction history for up to five years after you have closed your account, thanks to rules put in place by the Competition and Markets Authority (CMA).
Switching a bank account
In most cases, it's much easier to switch to a new provider using the Current Account Switch Service (CASS) which aims to close your old account and transfer all of your payment arrangements within seven working days.
It's backed by a guarantee that if anything goes wrong, any charges you incur will be refunded - and transactions to or from the old account are redirected for three years.
If you don't want to close your old account, you can choose a partial switch instead of a full switch. This is still an automated process and should still be completed within seven working days, but you aren't covered by the service guarantee and transactions won't be redirected.
Find out more: How to switch banks in seven days
Bank accounts and probate: closing an account on death
Once the death has been registered, the registry office will issue a death certificate – this is required by financial companies and government departments to settle the affairs of the deceased.
Usually, the person named as executor in the will notify any banks or building societies that the deceased holds savings and current accounts with. Where there isn’t a will, a family member can apply to be administrator of the estate.
Paperwork needed to close an account will include the death certificate, identity document and in some cases, an indemnity form (signing an indemnity form means you agree to compensate the bank or building society for any losses in the event of future claims made against the estate)
Find out more: What to do when someone dies
Banks will usually let you release funds from the deceased's account to cover probate fees, inheritance tax and funeral bills. Payments are generally made directly to HMRC or the funeral director.
You can often close an account without going through probate if the total balance is below a certain threshold (see table below).
If the total funds exceed this threshold, the bank will ask to see an official document called a ‘grant of probate’, or ‘letter of administration’ in Scotland, to prove that you have the right to manage their affairs.
A couple of banks (Barclays, RBS/NatWest) would not disclose their latest probate thresholds though we have referred to their previous thresholds:
|First Direct and HSBC||£5,000|
|Lloyds, Halifax, Bank of Scotland||£50,000 [b]|
|Metro Bank||£25,000 [c]|
|RBS and NatWest||£25,000 [a]|
|The Co-operative Bank||£30,000|
Correct at September 2020
[a] Refers to a probate threshold previously confirmed by the bank but may not be up to date. [b] As a result of the coronavirus pandemic, Lloyds Banking Group has temporarily increased the amount that can be withdrawn without probate to £100,000 per brand (applies only to Banking and Savings accounts). Under normal circumstances, the probate limit is £50,000 across all three brands as long as there are no other products involved, for example, a mortgage. [c] Or for any balance where the customer holds a safety deposit box.