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Fee free bank accounts explained


From the 1st January this year, the Treasury and the banking industry came to an agreement which means that nine UK high street banks will begin to offer fee-free current accounts. For the first time ever, bank accounts will be truly free to certain people, and they will be able to bank with the knowledge that they will not receive charges and not have an access to any overdrafts, authorised or unauthorised.

We have put together a blog on the new accounts below, including what they are, who qualifies for one and who will offer them.

How are fee free accounts different from other current accounts?

These new “basic” bank accounts will not charge an account holder if their direct debit or standing order fails. In some cases, people were being charged £35 per failed item uncapped, meaning charges could accumulate to hundreds of pounds over time and drive people into serious debt. As well as this, account holders will have no access to any kind of overdraft, authorised or unauthorised.

Basic bank account holders will be offered many of the same services as other personal current accounts, such as access to all the over the counter services at bank branches and the use of cash machines.

The government has claimed that making sure everyone in the UK has access to basic banking and financial services is at the heart of their long term plan, and these accounts will help ensure that the banking industry works for everyone.
The accounts will hopefully help unemployed people get and sustain a job, access opportunities to study and take part in wider society.

How can I qualify for a basic bank account?

The new basic bank accounts will be offered to anyone who doesn’t already have a bank account, is ineligible for a standard current account or who can’t use their existing account due to financial difficulty. If you feel like you might be eligible for one, ask your bank if you can still be charged if a direct debit or standing order fails, and whether you are eligible for a new basic bank account.

What are the banks offering basic accounts and what are they called?

Below is a list of all the banks offering basic current account and the product names:

• Barclays – Barclays Basic Current Account
• Santander – Basic Current Account
• NatWest – Foundation Account
• Ulster Bank (Northern Ireland) – Foundation Account
• The Royal Bank of Scotland (Scotland) – Foundation Account
• RBS England & Wales – Basic Account
• HSBC – Basic Bank Account
• Nationwide – FlexBasic
• Co-operative Bank – Cashminder
• Lloyds Banking Group (including Halifax and Bank of Scotland brands) – Basic Account
• TSB – Cash Account
• National Australia Bank Group (including Yorkshire Bank and Clydesdale brands) – Readycash Account

If you would like any further information about this subject or you have any other financial questions, please get in contact with one of our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.

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