UK Basic Bank Accounts Explained, Who Are They For and Why Would Someone Need Just a Basic Bank Account

A basic bank account is provided by most UK High Street banks and is very much the same as a regular bank account. The main differences between a Basic Bank account and a regular bank account are the features and services associated with each.

A regular bank account will offer you a cheque book, a Visa Debit Card or similar electronic payment card as well as an overdraft facility. These services are offered along side the regular features which include being able to pay Direct Debit and standing orders from your account. You can also have your salary paid into your bank account directly using the BACS system.

A Basic Bank Account differs from a regular bank account that it will not offer all of the above mentioned features. It will only offer the basic services such as being able to pay Direct Debits and Standing Orders from your account as well as being able to have your salary paid directly into your account via the BACS system.

These are the Basic Services which is why the account is called a Basic Bank Account.

Basic Bank accounts where introduced by High Street banks because a bank account became a necessity for anyone over the age of 16 as employers switched from paying employees by cash to paying their salary directly to their bank accounts.

Suddenly the banks realised that everyone had to have access to a bank account in their own name so they could at least get their salary paid to them. But the banks faced a problem, as did many people, to apply for a bank account the bank would access your credit rating. If you failed to meet their minimum credit score then they would deny your application to open a bank account.

A bank has to undertake a credit check when you apply for a bank account as a bank account can offer services such as an overdraft, which is a form of lending, so the bank has to assess the risk of lending money.

So, if a person fails that credit check the bank would refuse to open the bank account altogether, therefore leaving the person without a bank account at all.

To offer a solution to this problem the banks brought out a new bank account (which wasn't actually new - it was just a different version of the regular account).

This 'new' bank account was called a "Basic Bank Account" and specifically offered less features than a regular bank account. The obvious features that were removed from the Basic Bank Account include any form of lending, which includes an overdraft facility. A basic bank account will also not offer an electronic payment card such as a Visa Debit Card. It is normal that a cheque book would also not be offered.

In summary of who a 'Basic Bank Account' is for, it is fairly obvious that Basic Bank Accounts are offered to people who have a less than perfect credit score and who do not meet the credit criteria set by banks for 'regular bank accounts'.

Ok, so now we know that a Basic Bank Account is mainly for people who have a less than perfect credit score, which isn't the nicest thing in the world to admit to, the next stage would be finding a bank which offers a Basic Bank Account.

Now, imagine this, you know your credit isn't too good and you know you will be declined if you try to open a regular bank account, so you're left with the embarrassing situation of approaching your bank and saying, "Hi, I have a bad credit history and would like a bank account, do you offer a basic bank account"?

Personally, maybe you feel the same, I wouldn't want to walk into my local bank and start announcing that. While having bad credit shouldn't be something to be embarrassed about it probably isn't something you'll want to start announcing in a bank.

The easier option which will save you from feeling award is by simply applying for a Basic Bank Account with a High Street Bank via the internet. With a few simple clicks you can apply for and get accepted for a Basic Bank account regardless of your credit score.