Opening a bank account is one of the most important steps for everyone living in the UK. You need to have an account when you start working to get your salary, you will need a debit card to pay for your shopping, later you will probably apply for a credit card and good relationship with your bank will be very important to get it approved. Lloyds TSB, Barclays, HSBC, RBS, Santander, Natwest and Halifax are well known banks here in the UK and it might be relatively hard to decide which bank to choose. It all depends on your preferences.
How to choose the bank?
I personally prefer a big bank, were my money would be kept safe without a potential risk of loosing my savings if the bank goes bankrupt. The bank has to have good customer service and most importantly should offer the best online banking experience. As per the last point, my personal advice would be Lloyds TSB Current account. Lloyds bank has won the best online banking award for couple of years in a row and I can personally confirm, it is really easy to use, everything is very clear and you can move your money around with just couple of clicks. No fees, no hidden charges, free Debit card. If you are a UK student, you can get interest free loan as well.
Get interest on your current account
If you are employed full-time and manage to pay in at least £1000 a month, you can add Vantage to your Lloyds TSB current account and from that day your classic account becomes an excellent classic-savings account hybrid, earning you some decent interest every month. If you can afford to keep your balance between £3000-£5000 you will get a variable 3% interest accrued on a daily basis.
I have Silver Vantage Account which costs £7.95 per month. This gives me free mobile phone insurance, breakdown cover (well I don’t have a car, but I hope one day I will be able to afford that insanely expensive UK car insurance) and free European travel insurance for me and my partner. I really do benefit from having a Silver account as I travel every year and I have quite an expensive mobile phone. The best part is that after I get my interest, the charge for Silver account breaks even, so overall I pay nothing for it.
Get preferred interest rates even if you do not earn £1000 a month
If you cannot get £1,000 per month paid into your account, just do as we do. Ask your friend to transfer £1,000 to you and then just transfer it back, as long as you can get £1,000 in, does not matter from where it came, you qualify for Vantage account interest rates.
What do you need to open a bank account in the UK?
To open your account you need your passport/ID and proof of address (to find out what can act as a proof of address visit your preferred bank’s website). If you are a student, just ask for a Bank letter which will be provided by your university finance or other administration office.
If you came to UK and just started working, your Employer should be able to help you with the relevant documents. Usually employer would provide you with a letter (preferably on the headed paper). The letter template should include details as follows:
Real Case: Why not to bother trying to open your first bank account with HSBC
Honestly, their retail banking customer service is horrible. This is what happened to our friend. Well, he is not British and lives and studies abroad, but this summer he came to stay with us and find a summer job. He got one after four intensive days of CV handing out and filling in different applications online. But this is not the point. To get his first salary he needed to arrange himself a UK bank account. So his employer provided him with the bank letter (in the format above) and told him to go to HSBC since other employees had good experience with them before.
Our friend took his bank letter and went to HSBC branch. And what happened there? I am not going to go into too much details but the result was that he was told that HSBC do follow the policy which does not allow for a person who has not lived in the UK for at least 6 months (wtf?!) or is not planning on staying here for longer than summer (how do they know?) to open up his the bank account with HBSC. Obviously, if would have lied and told the branch employee that he has been here long enough or that he is planning on staying for good (since they obviously are not able to check this), he would have his account opened. In the end, HSBC told our friend to go to some other bank and they “might have” different policy.
Well, he ended up walking in Lloyds TSB and opening his account without any hassle at all. They even did not request the bank letter (since the original was written for HSBC). This just one more time confirms that Lloyds TSB are really great with their customer service and attitude comparing with other banks.