Whether you are a British citizen or a newcomer, chances are you will need a bank account, and you will need it as soon as possible. This used to be complicated and in some cases almost impossible. It’s a little simpler now. Here is our step-by-step guide.
The retail banking sector in the UK is dominated by a dozen or so banks, each with good and bad sides. The biggest players in the market are Barclays, Lloyds, HSBC and RBS. Let’s look at what each of these banks can offer you.
Barclays, with over 1,500 branches, is one of the oldest banks in the UK. We listed it first because we believe it is the bank where it is easiest to open an account for a newcomer. You can even take the first steps online if you wish.
The Barclays bank account is free – of course – and comes with a free contactless payment card. You won’t be able to use your account immediately, as you will be asked to visit a branch in the UK once you arrive and provide the necessary documents: reference number, passport and proof of address to activate your account. Barclays has a range of special offers for students and companies.
The International Student Account is also free and offers discounts in many stores across the country. In addition, Barclays provides a service to help students with CV writing and interview skills. Additional services can be added to the basic student account. Included in this offer is a free overdraft of up to £3,000 for 3 years and a contactless payment card. The Barclays Virtual Corporate Bank Account is also 100% free for the first year and offers a range of corporate finance, overdraft and credit card options. There is a dedicated customer service department with a
live chat where you can get answers to your questions in real time.
Lloyds is the market leader in current accounts in the United Kingdom where it has a strong presence with over 1,300 branches across the country. It’s easy to open an account with them, even if you’re a newcomer.
Lloyds even offers a product specifically designed for newcomers that you can use with your passport or ID card (if you are an EU citizen). It’s a free account, accompanied by a free contactless payment card.
Lloyds also offers a free account for international students. It allows a free overdraft of £1,500 for 3 years and possibly a credit card with a £500 limit. They also have 3 types of business accounts depending on the size of your transactions. They are all free for the first 18 months and come with tools such as free accounting software and legal advice at a preferential rate.
HSBC has more than 1,100 branches in the UK, with a denser presence in England and Wales. HSBC’s major advantage over its competitors is its international reach. If you are an HSBC customer in one of the 80 countries where they operate, they can help you open a UK account before you arrive.
Their basic current account includes free online banking and a free payment card. Contactless cards are linked to a set of criteria. HSBC may also require a credit check before they will allow you to open an account.
HSBC also offers a student account allowing £3,000 overdraft over 3 years and 2% interest on the first £1,000. It’s a good offer.
If you need a business account, several business bank accounts are available. They are all free for the first 18 months and the bank has an account manager to help you with your business banking. Check www.bank4pro.co.uk/ if you want to know how to choose the right bank account for your business.
The Royal Bank of Scotland and NatWest are both owned and operated by the RBS Group, and therefore offer similar products. Most of the Royal Bank of Scotland’s 700 branches are in Scotland, while the 1,400 NatWest branches are spread throughout the UK. NatWest has a current account offer called Select Account, which is free of charge and entitles you to a contactless payment card. They have an emergency cash service that allows you to withdraw money from your account using a security code if your card is lost or stolen.
NatWest also offers accounts for students and companies. As a student, you are entitled to an overdraft of up to £2,000 for 3 years and a 33% discount on National Express bus travel.
NatWest offers 4 different business accounts, adapted to different sizes of companies. If you are a start-up, you get free banking services for 2 years, a free business credit card for 12 months and a free authorised overdraft of £500 in the first year as well. If you want to open an account with them, you can contact them directly on their live online chat and get real-time answers.
Barclays, Lloyds, HSBC and RBS are the most important banks, but there are other interesting banks. TSB has an excellent reputation and is rapidly gaining ground on its competitors. It is easy to open an account there – even for new residents – and its Classic Plus account is a well-thought-out package. You receive 5% monthly interest on the first £2,000 in your account and 5% discount each month on the first £100 paid with the contactless payment card. Student accounts have a free authorised overdraft of up to £1,500 for three years.
Santander is a popular bank at the moment with its 1|2|3| current account. This account offers a 3% discount on domestic bills and 3% interest on credit balances between £3,000 and £20,000. To take advantage of this offer, however, a credit check is required, a condition that newcomers are rarely able to meet. After a year or more of residence in the UK, chances are that you will meet this requirement, so do not rule it out too quickly.
It’s always worth looking at the different bank offers to see which one best suits your needs. Our advice is to compare the offers before making your decision.