The UK is among the high rated countries when it comes to banking and many other aspect in the world. So it is of no doubt that many people ( both UK residents and non residents) often want to own a bank account in the UK.
For those that have already found their way to the UK, at some point during your stay there, you will see that you will be needing a bank account so as to ease your transactions ( Paying the rents, utility bills, and receiving your salary).
These are just the basic reasons that might trigger one to open a bank account, but that does not remove the fact that there many other reasons why you should consider getting a bank account instead of using the personal account that you have in your home country.
As expected, while functioning with a foreign bank account in UK, certain charges will be applied to every transaction and withdrawal that you make, more to that, opening a bank account in UK will help you have better control over your personal funds as there will not be any need for you to mind the currency exchange rate.
So now that you have an idea about the basic importance of opening a bank account in the UK, am sure some questions are now roving all over your mind and I will tackle them as we move on.
Table of Contents
Banking System in the UK
The United Kingdom is considered a global financial center, with a financial services sector that includes private UK banks, international banks, and publicly owned lending institutions such as building societies and credit unions.
The United Kingdom currently has 344 banks. The Bank of England is the central bank of the United Kingdom, and the Financial Conduct Authority regulates the banking sector (FCA). More information can be found in our guide to banking in the United Kingdom.
Documents Needed to Open a UK Bank Account
Have in mind that each bank will have its own additional requirements to open a bank account with them but below are the basic documents that each bank will demand from you in the UK.
- A Proof of Identity - This can be a passport, A driver's License or EU Identity Card
- A Proof of Address - This can be a Utility Bill, Telephone Bill, Council tac bill, tenancy agreement or a mortgage statement
Some banks will require more than one proof of address. If you're new to the UK, you may not be able to do this. In this case, a letter from a university or employer might be acceptable.
Note that you have to submit original documents and not copies. Also, keep in mind that despite that you can apply for opening a bank account in UK entirely online you will need to submit the documents in person at a local branch.
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Types of Bank Accounts in the UK
In case you want to open a bank account in the UK, there are various types from which you can make you choice depending on the one that best suits your needs. The main types of bank account in the UK are:
Current account
This is the most basic and widely used type of bank account, which can be used for everyday purposes such as paying bills, shopping, and receiving wage payments.
Current accounts are available for free or at a low cost (premium accounts will cost more), they include a debit card, and they usually include options such as credit cards and overdraft facilities. Most banks provide special versions of these accounts for specific groups, such as students and young people.
Offshore accounts
Expats in the United Kingdom may discover that opening an international offshore bank account is the best way to manage their finances. While working or residing in another country, it is possible to open an international offshore account in the United Kingdom.
Offshore accounts are available in GBP, EUR, and USD and typically require larger deposits than traditional bank accounts. They have some advantages over domestic banks, such as preferential tax treatment.
Savings account
Most banks have a range of savings and investment options that start with basic savings accounts. These accounts offer a higher interest rate but may require minimum deposits and stipulate that money needs to remain in the account for a minimum period, depending on the account type.
You’ll also find saving accounts available at building societies and friendly societies, such as Shepherds Friendly.
International or non-resident account
Many of the major UK banks offer international current accounts that you can open and operate from overseas.
Basic account
There exist numerous banks in the UK that offer free basic accounts for people with poor credit or who are struggling to open a current account. These accounts provide basic products and services such as Visa Electron debit cards and direct debit payment options, but no credit cards, loans, or overdrafts are available. If you open a basic account and your personal circumstances change, you can usually upgrade to a current account if the credit check requirements are met.
Digital or mobile account
All of the main UK banks now offer their services online and via mobile banking apps, so you can choose to run your bank account remotely. There are also online-only and mobile-only banks in the UK. See our guide to mobile banking in the UK for more information.
Joint accounts
You are also able to open a bank account in the UK jointly with other people and this type of bank account is mostly seen between married people that wish to save their funds together and in a common account.
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How Do I Open A Bank Account in UK?
It is not surprising that you will probably not feel the same with banking in another country as compared to how you actually when you are in your home nation, especially in a country where the banking system and the terms are different from what you are used to back home. But this is more of false impression rather than a fact and that is true even for the banking system in UK.
If you are used to banking in the UK, you must have noticed that banks in the UK have reduced formalities, making the process of opening a bank account much easier than it used to be.
These modified formalities include fewer documents, simpler procedures, and the ability to apply online.
In this article, I will provide you with a step-by-step explanation and associated details about opening a bank account in the UK for international students, but before we get into our main reason, I will first provide you with a brief introduction to the British banking system.
In the United Kingdom, there are numerous banks, each of which provides a unique set of services for a variety of purposes. Some banks in the United Kingdom may specialize in providing a wide range of banking services to various types of clients, whereas others may only serve specific clients.
The network of cooperation between the banks is not only based in the UK, but it also extends beyond national borders as many of them maintain strong links with foreign partners. The UK is also home to many foreign banks in especially from the US.
Well just like every other bank around the world, the UK offers various typed of bank accounts which you can see listed below;
- Current Bank Accounts
- Basic Accounts
- Saving Accounts
- Post Office Card Account
You should also note that, there also exist other types of bank accounts that are typical for a particular bank and an example of this is the Student additional account that is provided by the Barclays bank.
Also, there exist numerous banks in the UK that is meant to suit different customers and their financial needs.
- High Street Banks
- Business Banking
- Investment Banking
- Central Banking
So, let us get to the point of this article and look at the very first thing you need to do in order to open a bank account in the United Kingdom. Because there are so many banks in the UK, the first thing you'll have to do is decide which one best suits you while also taking into account a variety of other factors.
It is surely not easy for an expat like you to think of these things and for that, below you will see some of the factors that you must take into consideration that will guide you in making the best choice.
In the UK, there are a lot of banks in terms of range of services they offer, thus making them more convenient for a particular category that another one.
You must look for their transaction and maintenance policies, types of cards, the network of branches and ATMs, online banking, overdraft limits and currency exchanges in case there is.
You have to prioritize those banks whose administration cost are attractive to your budget as a foreign student and the network of its branches and ATMs should be extensive so that you can reach one at any time no matter where you are.
You also have to look for those banks whose student accounts allows you withdraw more money that you actually have in a condition that you pay for it later.
Banks usually place a restriction on how much you can get in a given period of time. Some banks, for example, may allow you to withdraw up to £3,000 over three years without having a single penny in your account.
As a result, we urge that you read the bank's account guidelines carefully before making a decision.
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4 Things to Take into Consideration before Opening a Bank Account in the UK
Before trying to open a bank account in the UK, it often necessary that you first of all take some factos into consideration so as not to hurry into a mistake that might cause you great expenditures of you loosing part of your funds.
Take time to make a decision
One of the most important decisions is you having to decide at which bank that you are going to open an account as you are going to make use of this for a long time. So I recommend that you make out enough time before making a this decision.
All you need in order to make a better decision is for you to make some online research a little about the banks and their various features. Depending on what you are, you will have to start by first of all sorting out the banks that are particularly important to you as a student for example.
Master Online Means
With the coming in of modern technology, banking has known a lot of changes and now you are able to complete a transaction just by the help of a click. Banks in the UK often run personal mobile friendly applications that will offer you effective, fast and flexible banking services at any time you want.
So in order to save you time, we recommend that you learn how to use these applications. You do not need to worry even if you encounter difficulties in learning the app as there are officers that will help you go about it.
Get into the Banking System
Last but not least, we strongly advise you to learn a little about the banking system. Banking regulations frequently change owing to a variety of causes, and consumers may be charged additional fees to cover maintenance fees, transactions, and other expenses.
Having a rudimentary awareness of these trends allows you to simply navigate through the pool of banks and select the one that provides you with the most cost-effective services.
Fees
Before thinking of opening an account with any bank, you will have to take into consideration the fee that they cut and for the various reasons that they do this.
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How to Open a Bank Account in the UK as an Expat
As soon as you are already in the United Kingdom, you are able to open a bank account at a branch or online but most often, you will need a UK address except if you are already banking with an international bank that has UK coverage.
When applying for a bank account, you will usually be required to fill out an application form and submit to a credit check (unless you are opening a basic account).
Each bank will have its own set of required documents. To open a bank account in the UK, you will need to provide proof of your identity and address.
In order to open a bank account in the UK as an expat, most of the banks will require you to provide the following documents:
- Passport/valid photo ID
- A recent utility bill (less than three months old) or council tax bill
- A recent bank or credit card statement
- Proof of studying in the UK (if applying for a student account)
- Proof of employment (some banks may ask for this)
How to Open A UK Bank Account from Overseas
Some banks in the UK like for example Barclays and HSBC, provide international bank accounts that can be opened abroad prior to relocating to the UK.
Exact procedures will differ from bank to bank, but the time it takes to open an account may be slightly longer than if you open one in the UK (sometimes around 10-15 days).
You may be able to open the account online, but if not, you will need to make an appointment with the bank branch in your home country that is closest to where you live. Passport/ID, proof of address, and proof of income are all required documents; some overseas accounts also require minimum monthly deposits.
Best Banks in the UK
Over the last decade, the banking industry in the United Kingdom has undergone significant change. A few large banks currently control a sizable portion of the banking sector.
HSBC Holdings, Lloyds Banking Group, Royal Bank of Scotland Group, Barclays, and Standard Chartered are the top five largest banks. This small group of banks has a monopoly on services to these businesses.Let us now take a look at the history and current status of the top banks in the United Kingdom.
1. HSBC Holdings
In terms of total assets, HSBC Holdings is the seventh-largest bank in the world and the largest in Europe. Although it was founded in Hong Kong in March 1865, it now has its headquarters in the United Kingdom's financial capital, London, and is the country's largest bank.
It offers a diverse range of services, including commercial banking, global banking, global private banking, retail banking, wealth management, and so on. The name HSBC is derived from the name used when the bank was founded in Hong Kong, namely the Hong Kong and Shanghai Banking Corporation.
2. Lloyds Banking Group
In the United Kingdom, the Lloyds Banking Group is regarded as a major banking institution. It was formed in 2009 by the acquisition of HBOS and the merger of HBOS and Lloyds TSB. Lloyds Banking Group also has four subsidiaries: Lloyds Bank, Halifax, Bank of Scotland, and HBOS. It is the second largest bank in the United Kingdom, with its headquarters in London.
3. Royal Bank of Scotland
The Royal Bank of Scotland Group, also known as the RBS Group, offers a wide range of services to its customers, including corporate finance, business banking, insurance, and personal banking. Its headquarters are in Edinburgh, Scotland, and it has offices all over the world.
4. Barclays
Barclays is a multinational investment bank and financial services company headquartered in London that operates in approximately fifty countries worldwide. Barclays provides corporate banking, personal banking, insurance, and wealth management among other investment banking services.
5. Standard Chartered Bank
Standard Chartered is a multinational financial services and banking corporation. Despite its London headquarters, it is a financial services company that does not provide retail banking services in the United Kingdom. Africa, Asia, and the Middle East account for a sizable portion of its revenue.
Final Thoughts on How to Open a Bank Account in UK
The UK is among the high rated countries when it comes to banking and many other aspect in the world. So it is of no doubt that many people ( both UK residents and non residents) often want to own a bank account in the UK.
For those that have already found their way to the UK, at some point during your stay there, you will see that you will be needing a bank account so as to ease your transactions ( Paying the rents, utility bills, and receiving your salary).
So in case you are planning to move to the UK for any reason, you will probably need a bank account that will help you mange your resources and also pay your bills. In this article, we have summarized what it takes for you to open a bank account in the UK so hopes the article is of use to you.
Frequently Asked Questions
Can foreigners open bank account in UK?
Foreigners can open a traditional bank account in the UK as long as they have proof of the address, which sometimes it's hard to get. Good news is that there are companies like Monzo or Monese which offer UK bank account, even without proof of the address.
Can I open bank account in UK on visit visa?
If you're on a tourist or visitor visa you can open a bank account by visiting a local branch and providing your passport. If you live in another country and don't intend to move to the UK, you'll need to speak to a local bank that has international ties with a UK bank.
Can I open a UK bank account without a UK address?
NeoBanks - These digital-only banks will set up the UK account for you without providing the proof of residency. Some of the popular Neobanks are Monese, Revolut, and N26.