Bank Accounts
Why do I have to change my bank account?
If you have a current account with a company you owe money to, you will be required to open a new bank account. This is not only the case with a Debt Management Plan or IVA but you should change your bank account if you are going to make reduced payments to a company that you also bank with. Banks have the Right to Offset so any money in your current account could be used to pay another debt with the bank.
Right to Offset
When you have fallen into arrears with payments to a credit card or loan and you also hold a current account with the same company, they can use the "Right to Off-Set" to take funds from your current account (without your permission!) to bring the debt back up-to-date.
Below is a list of Basic Bank accounts obtained from the FSA website
|
Bank name and any special name for the account |
Minimum age to open an account |
Free buffer zone |
Direct Debits and standing orders(1) |
Charge for unpaid Direct Debit or standing order (2) |
Debit card |
Bank branch counter access(balances, deposits and withdrawals) |
Post Office® branch access(balances, deposits and withdrawals) |
Free access to bank cash machines (ATMs) in the UK |
If any of the following apply to you, your application may be declined |
|
Alliance & Leicester: |
16 |
No |
Direct Debits only |
£25 |
No |
Yes (withdrawals over £250 only) |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Bank of Ireland: |
16 |
No |
Yes |
£42 (4) |
No |
Yes |
Yes |
No |
Undischarged bankrupt, record of fraud |
|
Bank of Scotland: |
16 |
No |
Yes |
£15 |
Electron |
Yes (withdrawals over £300 only |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Barclays: |
18 (3) |
No |
Yes |
£8 |
Visa debit |
Yes |
Withdrawals only |
Yes |
Record of fraud |
|
Clydesdale: |
16 |
No |
Yes |
£35 |
Maestro |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Co-operative Bank: |
16 |
No |
Yes |
£19.50 (4) |
Visa debit |
Yes |
Yes |
Yes |
Record of fraud |
|
First Trust Bank: |
16 |
£10 |
Direct Debits only |
£35 |
No |
No |
Yes |
No |
Undischarged bankrupt, record of fraud, record of bad debts |
|
Halifax:Easycash |
16 |
No |
Yes |
£15 |
Electron |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
HSBC: |
18 |
£10 |
Yes |
No (4) |
No |
Yes |
Withdrawals only |
Yes |
Undischarged bankrupt, record of fraud |
|
Lloyds TSB: |
18 (3) |
£10 |
Yes |
£20 |
Visa debit |
Yes |
Yes |
No |
Undischarged bankrupt, record of fraud |
|
Nationwide Building Society: |
16 |
No |
Yes |
£30 |
No |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
NatWest: |
16 |
No |
Yes |
£38 (4) |
Solo |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Northern Bank: |
14 |
No |
Yes |
No |
Maestro |
Yes |
Withdrawals only |
Yes |
Undischarged bankrupt, record of fraud, record of bad debts |
|
Santander: |
16 |
No |
Yes |
£5 – £35 (check with bank) |
No |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
The Royal Bank of Scotland: |
16 |
No |
Yes |
£38 (4) |
Solo |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Ulster Bank: |
16 |
No |
Yes |
£10 |
Visa debit |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
|
Yorkshire Bank: |
16 |
No |
Yes |
£35 |
Maestro |
Yes |
Yes |
Yes |
Undischarged bankrupt, record of fraud |
Source: British Bankers’ Association, November 2009
This information is correct as at time of publication but is subject to change. Please check with your chosen bank or building society.
Explanatory notes
- (1) Banks may cancel standing orders or Direct Debits if you don’t have enough money in your account to pay them on more than one occasion.
- (2) Correct at time of print but always check with the bank or building society.
- (3) 16 and 17 year-olds can open a similar account.
- (4) The account may be closed if a standing order or Direct Debit is refused three times.
- (5) No balance enquiries or printed ‘mini statements’ and only Nationwide bills can be paid.
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