Basic Bank Accounts

Who must provide you with a Basic Bank Account?

There are nine banks in the UK that must provide you with a basic bank account, if certain conditions are met.

These banks are:

  • Barclays.
  • Clydesdale and Yorkshire Bank.
  • Co-operative Bank.
  • HSBC.
  • Lloyds Banking Group (including Halifax and Bank of Scotland brands).
  • Nationwide.
  • Royal Bank of Scotland (including NatWest and Ulster Bank brands).
  • Santander; and
  • TSB.

When does a bank have to provide you with a Basic Bank Account?

For one of these banks to be required by law to provide you with a bank account, you must:

• Be legally resident within the UK.
• Not hold another bank account with another institution.
• Not be eligible for any other account with the institution that is not a basic bank account,

Where you have another account with another bank, you should not be treated as having an account with another credit institution, if you have been told to close that account.

What must a Basic Bank Account allow you to do?

A basic bank account should have several features. These are:

• They should allow you to deposit and withdraw money at their branch.
• They should be free.
• They should allow you online banking facilities.
• They should allow you to withdraw money from an ATM machine.
• They should allow you to set up direct debits, standing orders and to make electronic transfers,
• It should not allow you to run up an overdraft.

What proof must you provide when opening an account?

When you go to open a bank account, the bank will normally require you to provide both:

  • Proof of Identity; and 
  • Proof of your address.

Ideally photographic identification is best, such as a passport or a driving licence, to prove your indentity, but where this is not available, other evidence may be acceptable, such as a letter from HMRC or the Department for Work and Pensions regarding your benefits. 

Other evidence that may be acceptable is:

  • A birth or marriage certificate.
  • A council tax bill.
  • A gas, electricity or telephone provider bill.
  • A tenancy agreement.
  • A blue disability badge.
  • Student loan details.
  • A national insurance card.
  • A bus pass
  • Military ID

You will normally require two different pieces of evidence from two different sources, to prove your identity and address. Where you are in doubt, you should ask the bank and explore what options are open to you. 

When can a bank refuse to open an Account?

Banks can refuse to open a basic bank account if it would be unlawful for them to do so, or it would be contrary to:

• The Fraud Act 2006,
• The Money Laundering Act 2007,
• Contrary to Section 40(d) of the Immigration Act 2014; or
• The Bank as been told under the Financial Services and Market Act 2000, they cannot take on new business.

A Bank may also refuse to open an account if it believes the conduct of the customer may constitute an offence to one of its staff.

A consumer being bankrupt or having granted a protected trust deed is not grounds for refusing to provide someone with a basic bank account.

When can a bank close a Basic Bank Account?

A Bank can only terminate a basic bank account if one of the following conditions is met:

• The consumer has knowingly used the account for illegal purposes.
• There has been no transaction on the account for 24 months or more.
• The consumer provided incorrect information when opening the account and had the correct information been provided, the application would have been refused.
• The consumer is no longer legally resident in the UK.
• The consumer has access to another bank account with the features of a basic bank account and this was opened after the account with them was opened.
• The bank considers the conduct of the consumer constitutes an offence to one of their staff.

How quickly can a bank close an Account?

A bank can close an account immediately if the consumer has used it for illegal purposes, or provided incorrect information when opening the account; or their conduct constitutes an offence against bank staff.

If none of these conditions are met the bank must give two months written notice of their intention to close the account and specify their reasons for doing so.

What can you do if you disagree with a bank’s decision to refuse to open an account or to close one?

If you disagree with a Bank’s decision to close your account, you can make a complaint to the Bank.  Equally, if a Bank refuses to allow you to open a basic bank account, you can make a complaint.

When closing your account, your Bank should advise you that you can make a complaint.  They should also advise you that if you are not happy with their proposed resolution of your complaint, you can make a complaint to the Financial Ombudsman Service.