There are many different banks to choose from in London. Some are large, global entities. Others are much smaller. They all tend to offer pretty similar services.
For a current account (known as a checking account in some countries), you’d expect to be offered a standard package at whichever bank you choose to go to.
This would include the following:
- The ability to pay bills by standing orders and direct debits
- A debit card (also used to withdraw money from ATMs)
- A cheque book – although cheques are gradually being phased out in the UK, with many retailers (such as Tesco) refusing to take them any more
- Internet and telephone banking
You need a bank account in the UK in order to have your salary paid into. Bank statements are also a useful form of identification or a form of proof of your address.
However, one major stumbling block that some expats come across when trying to open a bank account in London is that you’ll be asked for proof of address when opening the account.
If you’ve just arrived, this can sometimes be a challenge, as you may not yet have a permanent place to live, or do not yet have utility bills in your name.
One clever way around this is to register your bank account in your home country with a UK address.
If you’re staying in a hostel, ask the owner if you can temporarily use that address, or if you’ve already got a place to stay, then register that address.
Alternatively, speak to a friendly relative or close friend who’ll agree to using theirs. Then you simply go online to your home bank account, print off a statement, and voila! You have your proof of address.
So, what banks can you approach? Well, there are loads to choose from. Some of the better known banks include:
It’s possible to open accounts online, or you can simply go into the nearest branch of your chosen bank and fill in a form. You will need to take a couple of forms of ID (driving licence, passport etc.) and as mentioned above, proof of address.
It’s common for banks to run credit checks on new customers. This is to find out if you’ve had problems with any credit repayments in the past.
For those who’ve been bankrupt in the UK, you will find that you’re restricted on the types of bank accounts you’re allowed to open.
Once all the paperwork has been completed, it takes a few days for the account to actually be opened and get up and running. It will take up to 5 (or even 10) working days for your debit card to arrive.
You’ll then have to wait for your PIN to arrive, so you can use the card. A PIN is a “personal identification number” that you should not disclose to anyone else.
This allows you to make payments with your debit card and withdraw cash from ATMs.
Extra facilities offered with bank accounts
- Once you’re bank has run a credit check on you, you may be asked if you’d like an overdraft facility. Some banks offer a small overdraft without fees – such as Barclays, who provide a £250 overdraft with all current accounts.
- Some accounts, such as Natwest, offer cashback on bill payments – up to 3% in some cases, but with a capped maximum amount.
- Others offer interest payments on credit balances – Santander pays 3% on balances between £3,000 and £20,000.
- Other banks offer money when you open a new account. First Direct offers £100 when you join. The Co-Op bank is currently offering £100 when you open an account, and also donates £25 to charity.
- Nationwide provides free European travel insurance, and they also offer a 0% fee overdraft facility for the first 12 months.
Alternative banking possibilities
There are some alternatives to regular bank accounts. For instance, M&S offers a current account and gives a free £100 gift card when you open one.
They also provide a £500 overdraft, with the first £100 being interest free.
How to choose the best bank account for you
Although most current accounts offer fairly similar services, each one differs slightly from the next. Because of this, when looking to open a bank account in London, it’s best to compare what is on offer.
This used to be a tedious task, but now, thanks to the many comparison websites, this has become simplicity itself.
For instance, Uswitch offers an easy way of comparing various different accounts in seconds. You can look at the cost of overdrafts, interest rates paid, any monthly account fee.
What if I’ve got bad credit or no credit rating at all in the UK?
The main problem expats might have when trying to open an account in London is that they’ve got no credit rating in the UK.
Thankfully, there are some specific ways around this. One is to open an HSBC Passport account.
This is an account tailored specifically for expats coming to the UK.
Not only will they meet all your banking needs, but they also understand that you won’t have a credit history when you first arrive.
The Passport account guarantees to give you a UK debit card, Internet banking, telephone banking and all the usual facilities you’d expect from a current bank account.
In addition, they also provide you with competitive international money transfers, a Western Union card, a £10 pre-loaded sim card with 75 free international minutes, and a multi-lingual relocation advice service over the phone, available in eight different languages.
If you’d prefer to look elsewhere, there are some specific UK providers for those with no credit history or bad credit.
However, do be aware that they do charge a monthly fee, so if you need to use such an account, do so for as short a period as possible to build up your credit rating, and then open a regular, fee-free, bank account.