Basic bank account: who it is for and how to open one fee-free

A basic bank account is a simplified current account for people who cannot get a standard one. It is completely free to run and has no overdraft, so you cannot slip into the red and rack up interest. For many it is the first and most reliable way to receive wages or benefits and pay bills.

Who is a basic account for?

It is designed for people who have no bank account, do not qualify for a standard current account, or cannot use their existing one because of financial difficulty. In practice a basic account is often open to those with poor credit history or going through bankruptcy too — because there is no overdraft, there is no credit risk for the bank.

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What can the account do?

You can receive wages, pension and benefits, set up regular payments — direct debits and standing orders — withdraw cash at ATMs, and use services in branch and at the Post Office. A debit card for shopping and paying online usually comes with it. A key difference: a basic account does not charge you when a payment fails for lack of funds — whereas such fees once reached up to £35 per item and were uncapped.

Where do you open one, and what do you need?

Nine of the UK's largest banking groups are required to offer a basic account, so you have a choice at almost every major bank. To open one you usually need ID and proof of address; if you do not have the standard documents, ask the bank about alternatives, such as a letter from a government body. If you are refused a standard account, ask specifically for a basic one: a bank generally cannot refuse it for the same reasons.

What if you are refused even a basic account?

A refusal is possible in limited cases — for example, if your identity cannot be verified or the bank has reasonable concerns about fraud. But reasons such as poor credit history, low income or no steady job are not, on their own, grounds to refuse a basic account specifically. If you are refused, ask for the reason in writing and try another bank from the list required to offer one — their document requirements differ slightly. If you disagree with a decision, you can complain to the bank, and then, if unhappy with the reply, to the Financial Ombudsman Service.

What next?

A basic account is not forever. When your finances improve, you can move to a standard current account with more features. For now, a basic account gives you the essential thing: lawful, free and predictable access to your money with no risk of hidden debt.