Banks & Banking

Opening a Bank account

There are many banks in the UK that will let you open an account; you will need one so that your employer can automatically transfer your salary to you. It is a good idea to shop around as banks compete for your business and rates can vary on current and savings accounts.

The UK has seen a lot of change in the retail banking market, with the rise of internet only accounts, or building societies (owned by their members) which have turned into banks (responsible to shareholders).

Many people use one of many ‘high street’ banks, so called as they have a branch in the main street of most towns. You will generally be able to manage your account online

Taking money out of your Bank Account

Once you have opened an account, your bank will issue you with a bank card to allow you to withdraw money from one of many ATMs (Automated Telling Machines). You will generally be able to withdraw cash from ATMs owned by other banks, but check first that they, or your own bank, will not charge you for this.

Your bank will also provide you with a cheque Book. Each cheque is a written authorisation to pay money from an account to someone else (called the payee). You can only use this cheque in the country it is issued and in the currency of that country. The diagram below shows you how a cheque should be filled in before it is presented.

Paying money into your account

You can pay money into your account either at the bank in person or by post if you are paying in a cheque from somebody else. You will need to fill in a paying in slip (supplied with your cheque book) with the details of your account and the amount you are paying in.

Be aware that if you are paying in a cheque or transferring money online, it can often take a few days until the money will be available in your account.

Credit Cards

Most banks will offer you a credit card (effectively a loan). There are many companies that specialize in offering you a credit card, without you actually having a bank account with them. It is worth shopping around for the best rate of interest on your credit card balance.

Mortgages

You may consider buying a property in the UK, most banks and building societies offer a loan (mortgage) of up to 95% on the purchase price and is generally repayable over a number of years (usually 25).

You have different options on which mortgage to chose (they can be quite confusing!) but they generally are based on you paying back the interest with the capital paid at the end of the duration of the loan or paying back capital and interest together. It is a good idea to speak to a mortgage advisor such as Charcol Online

Don’t forget also that you will also have to pay stamp duty when purchasing a property, which is a tax payable to the government based on the value of the property. Currently stamp duty is 1% on a property valued at under £250,000.