Despite easier than ever access to personal finance services, there are actually three million adults inside the UK right now who are entirely outside the banking system and don't have access to a bank account.
Many of these people are unable to get a standard account because they have a bad credit score, because of past monetary difficulties, or basically a lack of positive financial history. Even though high street banks are keen to deal with folks with good credit ratings, they can be cautious about making credit facilities such as overdrafts available to people with sub-prime ratings.
A brand new type of bank account was required when the industry's government prompted a goal of raising monetary inclusion. That was when the Basic Bank Accounts were born.
Basic bank accounts, also known as starter accounts or introductory accounts, are a very simple sort of account which provides little in the means of credit or even ways for account holders to get into debt. There's generally no overdraft facility, no check book, and no debit card. The accounts simply provide a way for money to be paid over the counter, by electronic transfer, and also withdrawn by money machine.
This lack of capabilities indicates that there's little risk or cost involved for the banks, and so their approval rates are much higher. In fact, about the only people who will have their applications rejected are undischarged bankrupts, or those with a history of fraud or really severe poor debt.
First of all, most accounts will allow you to set up direct debits to pay your bills, and this will save you money as many companies will give you a discount if you pay in this way. So how can getting a basic bank account help you? Ask a financial services provider or fsp by exploring, "financial service provider".
Furthermore, the government is heading towards paying all of the benefits and pensions direct into bank accounts rather than in the old way over the Post Office counter. Basic bank accounts will let you receive money in this way.
Finally, this type of account could be a 'stepping stone' into other monetary services, helping you to build up a much better credit rating and in the future to make the most of other services available such as overdrafts and debit or credit cards.
Since they were introduced, basic accounts have been very successful, and there have now been around five million accounts opened. Both government along with the banking industry say they're committed to increasing this figure much more over the next few years until every adult has some form of bank account. We can expect to hear a lot more about basic accounts in the near future.
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