Opening A New Bank Account
Opening a New Bank Account plus money and all related subjects
are covered on this site.
This very complex subject is covered extensively on this site.
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Please consult this extensive list of pages for any additional information you may be seeking.
Our pages must be read and taken into consideration with what is happening in the ever changing banking sector at the present time.
No matter if you are out in the wide, wide world earning your crust, or still at University or College don't struggle with your finances, the information is here on these pages.
This particularly relates to the start of the operation - when opening a new bank account.
One thing that applies in every situation is check your monthly bank statements
Stating the blindingly obvious - maybe - but it is amazing the number of people who just look at the final figure and then toss their statements to one side.
'Yes' - banks do make mistakes, and 'Yes', you really should look after your money.
Why not start by opening a new bank account?
Also please refer to the
Students Save Money
First Time Buyer Ideas
for specific information on these subjects.
WHERE WILL YOU SAVE YOUR MONEY?
Many people find their eyes glazing over at what they call this boring subject. This is where you can save yourself a mint. The following tips will help you.
Don’t leave your money in the same account for years.
Change the home for your money. It is possible to at least double the interest you receive on your accounts. So - take good advice - try opening a new bank account.
A First Direct account can be combined with a HSBC account and the use over-the-counter as well as telephone and on-line facilitie. To transfer your money around just use the (free) convenience of BACS transfers. When opening a new bank account this will be explained to you by the staff if you are unsure.
TIME LIMITED SPECIAL OFFERS
Periodically there are ‘special offers’ that are designed to attract new customers. Exercise caution on all offers as often they are not so beneficial as they would appear to be at first sight. TV advertising can also be not quite what it seems.
The highly expensive Halfax campaign showing a bank employee climbing to deliver a £5 note by hand, is a case in point. You will need to make a payment of £1,000 into your account every month just to achieve this £5 interest.
The latest announcement regarding bank accounts is that there is now a Financial Services Compensation Scheme. In the event of your bank failing, the compensation payable now increases to a limit of £85,000. This should now be displayed prominently in your bank or building society showing the amount of compensation that will be paid in the event of the collapse of the institution. In the event of a failure, your money should be returned to you within a period of seven days. Check the situation in your bank.
Many people, particularly the older generation, speak in awe of
these banking organisations and building societies when opening a new bank account.
To be realistic banks are only money shops charging us
for their ‘service’.
Don’t make their task easier by accepting their low rates of interest. Shop around. Consider opening a new bank account.
These organisations will make more than enough in profits every year, so make sure some of it comes to you via the interest rates.
With the Bank Rate at its present low point shopping around is well worth your consideration. It is still possible to obtain a reasonably good rate if you search around.
The sad fact is that people often get divorced more times than they move their account. Learn to be a ‘rate tart’ and invest where you receive the best rate of interest. A Bank Manager recently told the author that banks loathe 'rate tarts', which proves that by becoming one you are getting things right. So just move your money around - opening a new bank account with one major bank and close the other.
Swap around when these rates change.
Move your account
This is now an easy task as your new banker will be only too pleased to arrange the transfer of your Direct Debits and Standing Orders. They are keen to secure your business.
Keep in mind - you have the money - they want it -
you want the best interest rate.
Go for it. It's just a case of opening a new bank account really.
When you open a bank account think - will you need an overdraft? What is the limit and perhaps most important of all, what charges will your bank levy if you exceed the designated amount?
To quickly have an overview of this situation, go to current overdraft charges.
Overdraft charges vary from bank to bank. Check these rates as they are continually changing. If you regularly need to make use of the overdraft facility, you must keep a careful watch on this situation as these can be crippling.
Recently it had been thought that some bank customers could now be in line for a massive £lbn. refund after a recent significant decision in the High Court over unfair charges. A judge ruled that fees for exceeding overdraft limits and bouncing cheques were subject to 'unfair contract' regulations.
Following this decision it had been hoped for a change in the way overdraft fees are collected. This is no longer the case, and it would appear that the only way customers can stand any chance of recouping any of the charges levied against them is via a private prosecution. This is not good news.
'FREE' CURRENT ACCOUNTS
Some banks, such as First Direct are already paying no interest at all on current accounts.
Other banks are charging customers up to £25 per month for running their current account, offering incentives that they do not need.
Amongst these are Lloyds TSB Premier, Yorkshire Bank Current Account DTracker and Clydesdale Bank Current Account. This is according to the finance website Defaqto. Opening a new bank account elsewhere seems to be the answer. Try not to let any bank hold you to ransom.
VARIOUS BANK ACCOUNTS
At the time of writing with the financial market in a form of melt-down. The best advice in these circumstances is:
1. Investigate each offer carefully.
2. Look out for special offers - although some of which are not really so 'special' as instanced in the above offer by Halifax.
3. Find the best offer you can - but - keep a watchful eye on it because of the changing financial climate. Opening a new bank account elsewhere may be the best solution.
4. You may well get a very favourable rate of interest on any deposit/savings account. Banks now urgently need money because of their own liquidity problems following the sub-prime market fiasco.
As mentioned above, First Direct is an offshoot of HSBC. Therefore, although it runs a telephone/on-line operation you also have the convenience of paying in your cash, cheques over the counter at any HSBC branch. But the catch is, First Direct do not offer such competitive rates as telephone/on-line operations only. Only you can decide your priorities.
One solution here is to use the convenience of First Direct to pay in your small amounts of cash. When the sum starts to accumulate, transfer the necessary balance to one of the high interest paying on-line operations. The best of both worlds. Good service and high interest will enable you to save.
However, a very serious word of caution here. In February, 2007 HSBC (First Direct) introduced a new regulation whereby if you only hold one product with First Direct i.e., a cheque account then you will have to pay at least £1,500 into this account each month, or maintain an average balance on it throughout the month in excess of £1,500, or take out another product with First Direct.
If you choose not to this you will be charged a banking fee of £10 a month for the account. Also there is no interest on this account. No wonder HSBC have been offering a £100 bonus if you sign up to this account. This is a case where opening a new bank account might not be a good idea.
So think carefully before you act here. Definitely a case of doing your homework and don't allow yourself to be held to ransom.
Alliance and Leicester, and Birmingham Midshires are also offering good rates to savers. Maybe the spur to opening a new bank account with another bank. Check before you start moving your money because the situation can rapidly change.
Check that you have a good credit record when applying for loans – even missing things like a mobile phone payment for a couple of pounds can have a detrimental effect. The credit squeeze is taking effect and loans are now even harder to secure. An old time maxim is - Never a borrower nor a lender be!
Just keep thinking - save all you can. Bank Accounts are an ideal place to put this into practice. The amount of your money that banks are obliged to offer cover should they go bust, is now £85,000.
These are just a few illustrations of the offers that are available when you open a bank account. Don’t get caught!
LEARN THE LESSON - IT IS YOUR CASH!
One glaringly obvious tip regarding saving cash is to make sure your account remains in credit. Beware of exceeding your overdraft as the interest levied is painfully high.
Now - try to remember what the grim looking teacher is saying to you: Most important of all
think before you spend money.
Save money. A short time spent doing your homework will increase the amount of your money at your disposal. If in doubt consider opening a new bank account with a 'friendly' bank.
The Nationwide Building Society allow you a cheque book. so although not a bank, it has definite advantages.
Even if you are still a student
it's never too early to start taking care of it!
As a rule, telephone and online operations give a higher and better rate of interest than the big five organisations. Their overheads are less therefore they are able to be more competitive. Become a 'rate tart' consider opening a new bank account elsewhere.
This is likely to increase in the not too distant future if some penalties that the big five can impose are removed by law, and instead they start charging up to £300 for operating your accounts in order to maintain their already enormous profits.
Should you meet up with insurmountable problems, maybe it is time to take action to avoid
the bankruptcy court.
YOUR CREDIT CARD
Make your credit card works to your advantage. If your card issuer is Tesco for example, use your card to pay for all your groceries, petrol, in fact anywhere you can. Pay the bill in full when it arrives, so that you do not incur any charges. Each quarter Tesco will send you the vouchers you have earned for using your card. These you can spend on groceries or petrol. A self-perpetuating roundabout to save money. Well worth using.
You have probably worked very hard for the money you earn, so don’t lose it when it comes to choosing a bank or credit card supplier.
Keep a very careful watch on your money and don't hesitate open a bank account elsewhere should it become necessary. Only you can watch your money.
To assist you, take a look at our 'Related Pages' section below.
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Because of the financial situation prevailing here and the static interest rate set by the Bank of England, it will be advisable to check any new bank account you may be thinking of opening.
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