Ever wondered what the different types of bank accounts are - here we explain basic, current and joint accounts as well as what happens to a joint account if you separate from your partner.

Basic Accounts

Click here to see what basic accounts are available from the main high street banks and their basic underwriting criterea.

With a basic bank account you can pay money in, draw cash out by card and set up payment directly to pay your bills. You can only withdraw the money if there is enough in the account.

These types of accounts do not usually let you overdraw by more than £10. If you pay your bills by Standing Order or Direct Debit then you will need to ensure that you have enough money in the account in the first instance, otherwise you may have the payment refused and receive bank charges accordingly.

You can find out which banks and building societies offer basic bank accounts and what services you can expect to get from them. All these accounts accept Automated Credit Transfer (ACT) payments, offer cash withdrawals at the Post Office®, and a cash-machine card. None of them offer a cheque book. See Basic Bank Accounts.

Do I need to open a bank account?

Most individual’s income such as state benefits, tax credits, student loans, maintenance allowance, wages and pensions is now paid direct into a bank account , therefore, not to have one can prove to be an inconvenience.

How much do I need to open a basic account and is there a minimum age?

Sometimes just £1 is all that is required, however with most banks you don’t need to deposit any money initially. The minimum age is 16 however in some cases it is 18) - for more details of this see the table illustrated below.

How do I get my money out of the bank?

One way is through a cash machine but be aware that some banks will charge for this. You can also go into the bank or building society that you have the account with. Some accounts such as those held with the Alliance & Leicester, Barclays, Lloyds TSB and Co-operative Bank can also be accessed through your local Post Office. There is also the cash-back facility often provided by supermarkets. With a basic account you do not get a cheque book.

Can I check my balance on the account?

This can be done through a cash machine, bank or building society you hold the account with or, in some cases, the Post Office.

Will I still get bank charges when I use this type of account?

If you have insufficient funds in the account when a Direct Debit is called upon then the bank will refuse payment and may well make a charge for this, this may also apply to Standing Orders.

*Also note the potential charge for a cash machine withdrawal*. If you mistakenly use a fee charging machine then you will be warned on-screen prior to continuing the transactiojn which enables you to stop and go elsewhere.

Could I be refused a basic bank account?

It is possible, but the decision rests with the bank. Some will carry out a credit search and will determine their decision based upon this, however as you are not looking to borrow or request an overdraft, then irrespective of your credit history some banks will still allow you to open an account with them - for details of what’s available see the table illustrated below. You will be asked for proof of identification such as a council tax or utility bill, pension or benefit book and / or a current driving licence. If you have neither of the above then it is possible that the bank will accept a letter or statement from a responsible individual who knows you, such as teacher, social worker etc.

Can I get a debit card with a basic account?

Some bank accounts may offer such a card often referred to as 'Solo' or 'Electron' card. You can use this type of card to pay for goods and services when out shopping, but there has to be enough money in you bank account to cover the purchase as it is taken out immediately upon completion of the transaction.

How do I pay my bills using this basic account?

• Direct Debits - you agree a date and the amount with the organisation that you wish to pay. The organistaion have to give you notice in writing if they wish to change either of the above.
• Standing Orders - here you inform your bank of the amount to be paid and the money is taken out of your account on the agreed date. It is your responsibility to notify the bank if the payment / date needs to change.

Current account

If you want a cheque book or the facility of an overdraft at the bank then you will need to open a current account, sometimes referred to as an ordinary account. Some banks may also issue you with a card that will guarantee cheques, can be used at a cash machine, pay for goods when out shopping or via the Internet. Usually the bank will detail the conditions and use of the card. With this type of account there are stringent requirements following a credit search and other conditions may also apply, such as the need to have your salary, pension etc. paid directly into the account.

Points to bear in mind when deciding which bank or building society is right for you?

Make sure that:

• there is a branch or Post Office, associated with the bank nearby for you to be able to draw out cash.
• you can use the cash machines free of charge both near your home and place of work.
• the bank offers the services you need, such as Direct Debits, Standing Orders and cash card etc.

Credit rating

If you are worried about your credit status or just wish to check that the details recorded against you are correct and up to date then click here. In this section we illustrate the four different ways of how to see your file as well as how to disassociate yourself from other household members that have no financial connection to you.

Joint accounts

Joint accounts can be very useful where the finances of two (or more) people are closely linked, but it is essential that the account holders know exactly what their rights and responsibilities are. Here we deal with some of the most frequently asked questions.

What is a joint account?

An account which is opened in the names of more than one person.

What is the benefit of a joint account?

• More than one person can sign cheques, for example when one of the joint account holders is away from home on business. In this case you would need to instruct your bank to accept the signature of any one account holder alone.
• Will ensure that funds are only paid from the account provided both or all account holders have signed the instructions to the bank. In this case you would need to tell your bank that it could only accept instructions to pay money if all the account holders have signed.
• Some find it easier to budget by making regular transfers from their own personal account(s) to a separate joint account which can then be used to pay household bills.

Do all the joint account holders have to sign cheques?

Signing arrangements are at the choice of the account holders. Options range from any of the holders to sign alone to all joint holders having to sign every instruction to the bank.

I have the choice of either to sign on the account and now wish to change this, is this possible?

Any joint account holder can cancel the joint account mandate. This will mean that the bank will need the signatures of all the account holders before it can pay any further items from the account.

Will I be responsible for cheques signed by my partner on the joint account?

Yes, provided the cheques are signed in accordance with the joint account mandate.

What happens if my partner and I split up?

You will need to go to your bank to close the joint account and open new accounts in your sole name(s). The bank will also need to inform the bank how you wish them to handle any existing monthly or regular payments such as standing orders or direct debits.

Will I still be responsible if my partner leaves me, stops paying into the account but continues to write out cheques?

Yes, if the cheques are supported by a cheque guarantee card, the bank will be obliged to pay them. In these circumstances you should contact the bank immediately and arrange for the account to be split. You will continue to be liable for the cheques and any resulting overdraft until you tell the bank to cancel the joint account mandate.

If my partner overdraws the account or leaves me will I be responsible for repaying the debt?

Each joint account holder is fully liable for the whole of any overdrawn balance.

My partner and I wish to open a joint account, do we both need to attend the bank to open it?

Normally yes, however if the account is a postal or telephone based account, then this can be done through the post.

My joint account is overdrawn, I am worried that the bank may transfer money from my personal account to clear this, is this possible?

As a general rule, yes.

My personal account is overdrawn, can the bank transfer money from our joint account to clear this?

As a general rule, no. You will need to check the terms and conditions on the account.

I want to open a joint bank account with one of my parents as a joint holder, can I do this?

Yes, subject to normal banking criteria.

What happens if one of the joint account holders dies?

The balance will automatically pass to the remaining joint account holder(s).

If one of us is an undischarged bankrupt, can we still open a joint account?

An undischarged bankrupt cannot open any type of bank account without the permission of the Official Receiver.

I want to open a joint account with my partner but (s)he has a poor credit record, will we get refused?

This would be a commercial decision for the individual bank.

Will all parties to a joint account need to produce a driving licence or passport as identification before the bank will open an account?

Each bank has its own criteria on forms of identification and will need to be satisfied that the identities of all the account holders are valid.