There have been new calls for 'minimum standards' to be introduced in the banking industry to guarantee that all providers act equally to provide basic bank accounts.
Consumer Focus has said that basic bank accounts have been successful for the banking industry. However, it's warned that 'dark clouds' could be on the horizon if a minimum, industry-wide standard is not introduced to ensure they survive.
According to the watchdog, one in five adults in the UK has a basic bank account as their main or only bank account, giving them access to their money and providing basic facilities. There are around 20 basic bank accounts available on the market and many of them are used by people who have had financial problems in the past and can't open a standard account.
Yet in recent times, some providers have announced restrictions on basic bank accounts, such as stopping undischarged bankrupts from opening an account and withdrawing access to the Link cash machine network for basic bank account holders.
In response, Consumer Focus has called for action from all banks and building societies to stop any further restrictions on basic bank accounts in the future. It is calling for all providers to introduce minimum standards including:
- No big fees for unpaid charges
- Buffer zones for small overdrafts
- Free debit card use/electronic payments
- Full access to cash machines/Post Office.
The calls have also been backed by the Co-operative Bank, who believes that action should be taken immediately to give banking customers fairer choice and equal access to basic bank accounts.
However, standard basic bank accounts offered by high street providers aren't the only option if you are looking for a basic bank account. There are alternatives on the market, such as the thinkmoney Personal Account.
For a set monthly fee of £14.50 (or £21.25 for a joint account), you get access to our team of dedicated Money Managers, a personalised budgeting service and a thinkmoney Debit MasterCard® which can be used at all ATMs wherever you see the MasterCard acceptance mark.
The account works much the same way as a basic bank account as there is no overdraft or credit facility, so you can't overspend. There are no credit checks involved when applying for the account, so if you have a bad credit rating, are an undischarged bankrupt or have been bankrupt in the past, you can still apply.
On top of this, the account allows for Direct Debits and standing orders and also comes with online account management, SMS and telephone services.
Moreover, the key factor of the thinkmoney Personal Account is that, although there is a set monthly fee, this is all you will ever pay. So if you struggle to manage your finances from month to month and face frequent and unexpected bank charges, it could be the perfect account for you.