Opening an online bank account: Our step-by-step guide
It’s quick and easy to open a new bank account. Here’s the information you need to get started
Key takeaways
Bank accounts offer a secure place to keep your cash
Your money will be FSCS protected (up to £85,000 per person) if the bank fails
Personal details proof of ID and adress will be needed to open a bank account
Do I need a bank account?
In today's financial landscape, the question isn't so much whether you need a bank account, but rather how to find one that best suits your needs. Bank accounts have become a fundamental part of personal finance management, providing a secure place to store your money and access a range of financial services. From receiving your salary to paying bills and saving for the future, bank accounts play a pivotal role in everyday transactions.
Benefits of a bank account
Storing Money
A bank account isn't just a place to stash your cash; it's a secure vault that often comes with the added benefit of earning interest over time. Whether it's your monthly salary, a windfall, or regular savings, your money is typically safer in a bank account than under your mattress.
Keeping money safe
Keep money safe: Having a bank account can also protect your cash. If your bank is regulated by the Financial Conduct Authority (FCA), your money will be protected by the Financial Services Compensation Scheme (FSCS). Under the FSCS, up to £85,000 in your bank account or £170,000 in a joint account is protected if the bank or building society goes bust.
Proof of payment
Bank accounts provide a digital footprint of your financial history. This can be invaluable when you need to show proof of payment for transactions, whether it's for personal record-keeping or resolving disputes.
Considerations before opening a bank account
Before you dive into opening a new bank account, consider what features are most important to you:
Will you need an overdraft facility? If so, what limit are you looking for?
Do you want an account that offers zero fees on using money abroad?
Would you like an account that offers rewards and cashback?
Are you looking for cash switching incentives for new customers?
Consider if an initial deposit is required and how much it is.
Information needed to open a bank account
Opening a bank account will require you to provide personal information such as your name, date of birth, nationality, address and previous addresses, marital status, and contact details. This information helps the bank confirm your identity and assess your financial history.
Proof of ID and address
To open a bank account, you'll need to provide proof of your identity and address. This can include a recent utility bill, council tax bill, rental or mortgage contract, bank statement, or a benefits or state pension letter.
Opening a bank account online
The digital age has made opening a bank account online a quick and straightforward process. With most banks offering online applications, you can set up an account from the comfort of your home.
Opening a joint account
Opening a joint account can be done online, in-branch, or over the phone. It's a convenient way for couples or business partners to manage shared finances. Both parties will need to provide proof of ID and address, and sometimes, one or both individuals may need to already have an account with the bank.
Opening an online-only bank account
Online-only banks, also known as challenger banks, have risen in popularity recently. Banks like Monzo are online-only as they don’t have any physical branches. You can usually open an online-only bank on your smartphone with the bank’s app or online through their website. You will need to provide proof of identity and address so they can verify your details. Some digital banks may require you to record a video of yourself as well as supplying documents so they’re sure it’s really you.
Opening a bank account in-person
For those who prefer a more traditional approach, making an appointment to open an account at a branch is still an option. Remember to bring all the necessary paperwork to ensure a smooth process.
Switching from an existing bank account
It’s easy to switch from an existing bank account to a new one – all the details will be handled by your new bank. When you apply, simply tell your new bank that you’d like to move over your current account.
Switching is a great way to make sure you’re getting a bank account that does the most for your money. Even if you’re happy with the bank account you have right now, it always pays to see what else is on offer – and there’s no better way than by comparing online.
Other useful guides
For more information on managing your finances, check out these guides:
Comparing bank accounts with MoneySuperMarket
Finding the right bank account can be a daunting task, but with MoneySuperMarket, you can easily compare current accounts from leading UK banks. Sort by overdraft limits, introductory offers, or customer satisfaction to find the account that fits your financial needs.
Having a bank account is more than just a convenience; it's a necessity in the modern world. Whether you're looking to keep your money safe, manage your daily transactions, or save for the future, there's a bank account out there that's perfect for you. With the right information and a bit of research, you can take control of your finances and make your money work harder for you.
Can I open a bank account for someone else?
In general, you can’t open a bank account for another person – unless you’re a parent or guardian and you’re opening a bank account for a child, or you have power of attorney. However, you can easily open a joint account with another person.
How do I close a bank account?
If you want to close your account for any reason, simply get in touch with your bank. If you’re overdrawn, though, you’ll have to pay off what you owe before you can shut down the account.
Can I open a bank account if I am unemployed or on benefits?
Yes, you can still open a bank account, whatever your financial situation. If you’re on benefits, you’ll need a bank account to deposit the money. Just keep in mind that you might not be eligible for some types of accounts without a certain level of income.
Is there a minimum amount I have to open my bank account with?
No, many banks will let you open an account without any initial deposit.
Will opening a bank account affect my credit score?
Like any change to your financial status, opening a new bank account could lead to a small dip in your credit score. Your credit should recover pretty quickly though – it’s only a problem if you keep opening new accounts before your credit score has time to bounce back.
