Bank Accounts - Safe & Basic
Everyone can have a bank account. Which one depends on your financial background and current situation. Most banks use credit reference agencies to assess your application. The good news is that even with a low credit score, there is a bank account product applicable to you called a 'Basic' Bank Account.
If you have an overdraft or any other debt with your bank, you will be advised to open a 'Safe' Bank Account. This is a type of bank account that does not grab your income to offset borrowing with the same bank.
A safe bank account will not be frozen while you are in a debt solution.
Basic Bank Accounts
A basic bank account is offered when you have a low credit score, i.e. if you have missed payments or have debts. Features include:
Safe Bank Accounts
A safe bank account is opened at a bank or building society with no debt owed to them. Reasons to switch are:
Debt Advice - Banking
Banks can freeze your accounts when a debt solution is notified to them, this prevents you getting any credit balance out until the account is unfrozen, you could be without any money over a weekend. Banks can also use 'right of set-off' if you owe any other debts to them.
Banks offering Safe & Basic Accounts
The following banks/building society must now allow anyone in a formal debt solution, such as bankruptcy, debt relief order or IVA to open a basic bank account:
Digital banks are banks that do not have a high street presence, their banking facilities are only available through a mobile banking app. These digital banks are sometimes referred to as 'challenger banks'. If you are able to use your smartphone or tablet with confidence, this type of banking might be a good option.
Current account switch service
The majority of banks have a guarantee that will let you switch accounts within seven days. This is referred to as the Current Account Switch Guarantee. In addition banks will guarantee that payments in and out of your new account are switched over in time to ensure you do not miss any regular bills or payments.
Business Bank Accounts
If you enter a formal debt solution as a business, you will not be able to continue to use any previous credit lines, this will be an important consideration if you need credit to continue trading.