Setting up a new bank account? Whether it’s your first time or you’re looking to try out a new bank, we’re here to walk you through all the stages of opening a bank account.
Why open a bank account?
Few people keep their money stuffed in a mattress – but if you’re in any doubt about bank accounts, here are some top reasons to open one:
A bank account can help protect your money from theft. For example, unlike cash you can cancel your card or replace it if it’s stolen
Most employers will want to pay your salary into a bank account
A bank card can be a convenient way to pay for things (especially online). It also lets you access cash when you’re out and about
A bank account can help improve your credit score in the long run, meaning you’ll find it easier to borrow money
Bank accounts can help you save money, share your finances, and even earn interest or rewards
You can have more than one bank account so you might want to open a new one to try out a different bank or take advantage of offers
A bank account is a safe place to keep your money. Monzo accounts are fully covered by the Financial Services Compensation Scheme (FSCS). That means up to £85,000 of the money in your account is protected, if anything should ever happen to Monzo. The FSCS covers companies that have been authorised by the UK regulators, the Financial Conduct Authority or the Prudential Regulation Authority (PRA).
Which type of bank account should I get?
To help you decide, we’ve explained some of the main types of bank account: current accounts, savings accounts, basic bank accounts and joint accounts.
Current accounts
Current accounts are typically used for everyday money management, such as paying bills, direct debits, standing orders and receiving your salary. You’ll get a debit card (and sometimes a cheque book) when you open one. Your bank may give you an arranged overdraft on your current account too, sometimes with an overdraft limit.
Find out more about opening a current account with Monzo!💰
Savings accounts
Savings accounts can help you put away money for the future. You might be saving for something big – like a new car or holiday – or simply creating a rainy-day fund for emergencies. A savings account pays interest on the money you put away, so over time you’ll see your savings grow. The interest rates, fees and how you access your money vary, depending on which kind of savings account you choose and the bank or building society you're with.
Basic bank accounts
If you’re finding it difficult to open a current account because your credit score is low, you might want to apply for a basic bank account. These are designed for people without good credit histories, so you won’t have access to an overdraft or cheque book. But there are no fees and you don’t need to deposit money to open one.
Joint bank accounts
These are useful for people who want to share their finances, like couples, families and even housemates. A joint account can be in multiple people’s names, meaning each of them can add and use the money.
How to open a bank account
You can usually apply for a bank account online, over the phone or at a bank branch. You can sign up to Monzo through your phone, just download the app!
Most banks will ask for your:
Full name
Address
Date of birth
Contact details
Depending on the bank and type of account, they might also ask you about your job, income, national insurance number or marital status.
Next, you need to show proof of ID. This is usually a driving licence, passport or other government issued photo ID.
Finally, many banks ask for proof of your address. They normally want two documents, such as a recent:
Household utility bill (e.g. for gas or water)
Council tax bill
Bank or building society statement
Tenancy agreement or mortgage statement
Many banks won’t accept these as proof of address:
Mobile phone bills
TV licence
Online bills or statements
How long will it take to actually open a bank account?
Applying for an account may take minutes or hours, depending on the bank.
Banks may take several days to process your application. Some will run a credit check as part of this. A credit check means they’ll look at information about your past financial behaviour, such as how much you’ve borrowed and if you make repayments on time.
Find out whether your bank’s going to do a soft or hard credit check, because hard ones can affect your credit score.
You can start using your bank account as soon as you’re approved. But it may take a few weeks to get your bank card in the post.
Signing up for a Monzo account only takes a few minutes! Just download the app to get started. Once you’ve signed up your contactless debit card should arrive in the next couple of days.
What if I want to switch accounts?
If your current account isn’t cutting it, you might decide to switch to a better one elsewhere.
Thanks to the Current Account Switch Service, your new bank will do the legwork. This includes closing your old account, moving your balance and updating your payments. You can even switch accounts if you have an overdraft, as long as your new bank agrees to it.
You may need to fill in a transfer form if you’re changing savings accounts. With a joint account, you’ll need to get each account holder to agree to the switch.
Just make sure to check the terms of your account before switching. In some cases, your bank may charge you a fee for leaving early.
What if I’m refused a bank account?
Banks are allowed to turn you down for an account, and they usually don’t have to give a reason.
However, they aren’t allowed to discriminate against race, sex, disability, religion or sexuality. If you think you’ve been discriminated against, contact the Citizens Advice Bureau for support.
If you’ve been refused a bank account, it could be because your documents (such as ID and proof of address) aren’t accurate, suitable or recent enough. Always check what the bank’s requirements are.
Another possible reason for getting turned down is a low credit score. In this case, you may want to look into getting a basic bank account or improving your score.
Finally, make sure you’re not applying for an 18+ account if you’re under 18. Some banks have special accounts for people aged between 16 and 17 years – we’re one of them!
Opening a bank account with Monzo takes minutes! Give it a try today.
This post was updated on 18th November 2019