Banks and Building Societies

Banks and building societies provide a range of financial services to help people manage their money.

As well as offering current accounts and savings accounts, they also offer credit cards, loans and mortgages. Every bank or building society is different and the services they offer can vary.

Before signing up for any bank or building society service, always look around for the best deal and never sign anything if you don’t fully understand the conditions. Always read the small print!

If you are worried about your finances, talk to the Citizens Advice Bureau or the Money Advice Service for advice. If you have a complaint about a bank or building society, write to its head office or contact the Financial Conduct Authority, which regulates all banks and building societies.

Types of Accounts

Banks and Building Societies offer several different types of accounts for you to use, depending on what you are planning to do with your money.

Accounts are there to help you control your money and earn extra money from it in the form of interest given to you by the bank or building society. Talk to your local bank or building society about the accounts they can offer you – shop around to find the one that suits you best.

You can check out these handy guides to start deciding.

How to choose the right bank account

Citizens Advice – Types of bank accounts

Basic Bank Account

  • These accounts let you pay in money, set up standing orders and direct debits and get out money using a cash card at a cash machine.
  • You cannot go overdrawn on a basic account, which means you can only take out what money you have available personally.
  • This is a good way to start controlling your money and you can have as many basic accounts as you like, as long as they are at different banks. They are usually open to most people, even if they have credit problems

Current Account

  • A current account is a bank or building society account for your day-to-day business or transactions and is similar to a basic account
  • You can have more than one current account with different banks or building societies
  • A current account allows you to get out money with a cheque book or cash card and pay standing orders and direct debits.
  • You can withdraw money without warning from cash machines or cheques
  • You might also be given a debit card, which allows you to pay for items in shops and restaurants for example.
  • Some current accounts may also give you an overdraft. This is a type of credit that allows you to withdraw extra funds from your account, when you have no money left. You will usually be charged for this

Student and Graduate Current Accounts

  • These accounts are designed to help you manage your finances during your studies in higher education and give you certain benefits over other current account holders
  • Most student accounts offer free banking and interest-free overdraft facilities to a certain limit. Many also have student advisory services to help you manage your accounts
  • Many banks and building societies offer an incentive to sign up to their student account, including free cash payments, rail cards, retail or book discounts. This varies depending on where you apply. Look into the best option for you. For example, if you live away from your parents, a rail card might be useful. However, if you live close by, you might prefer to have a cash payment or a free gift
  • You also need to research what interest-free overdraft facilities other banks and building societies are offering to get the best deal for you
  • You will need proof of your student status from your university to apply
  • Remember, the overdraft is not free of charge forever and you will have to repay it after you have finished studying so try and stay in control of it
  • Most student current accounts will be transferred into graduate accounts once you have finished university
  • These accounts aim to help graduates with their money and debts for up to three years after graduating
  • They will often continue to offer staggered interest-free overdrafts for three years, reducing the interest-free level each year to help to clear the debt slowly
  • Some also offer additional benefits like money-off vouchers or reduced rate loans or mortgages. Check with your bank or building society for its offers or visit the Debt section for more details

Joint Account

  • With a joint bank account, two or more people are able to access the money in the account
  • Joint account holders can all pay into the account and pay bills, write cheques or withdraw cash (although sometimes more than one person needs to agree to this)
  • These accounts are often used by married couples, civil partners and couples who live together or housemates who have shared expenses

Post Office Card Account

  • These accounts can only be used to collect benefits, tax credits and state pensions.
  • You cannot pay any other money in and it can only be taken out at a Post Office counter
  • This account is available to almost everyone. Ask at your local Post Office for details

Savings Account

  • Savings accounts are designed to help you save your money and earn interest on your cash
  • There are several types of savings accounts, depending on how much money you want to save, how long you want to save your money for and whether you want to pay tax or not

Instant Access Savings Account

  • This account allows you to save your money, earn interest and have immediate access to your cash as soon as you need it
  • Many people use instant access savings account as emergency funds to meet any unexpected costs straight away
  • You will have a cash card with your account so you can access your money 24 hours a day from any cash machine
  • Please remember, there might be a limit to how much you can take out in one day from a cash machine so plan for this in your finances. Your branch will allow you to withdraw all of your funds in one go if necessary
  • The instant access savings account will offer a lower interest rate than other savings accounts
  • Research to find the account offering the highest rate available but check that ‘instant access’ really means just that. Some Internet banks need a few days to get your funds to you and this will be no help during an emergency

Cash ISA (Individual Savings Account)

  • These savings accounts allow you to save and earn tax-free
  • Some cash ISAs require 90 days notice to access your money. If you think you’ll need your money in a hurry, opt for the Instant Access Cash ISA which allows you to withdraw your money as soon as you need it
  • There may be some restriction on how many withdrawals you can make each year
  • Cash ISAs are more suitable for regular, monthly savings

How do I open an account?

If you want to open an account, do your research first. Find out what the banks and building societies are offering and choose the right one for you. Compare interest-rates and incentives.

You will need to take certain forms of identification with you in order to set up the account. This is to prove you are who you say you are. They will usually request your passport and proof of where you live but check with your branch before arriving so you can ensure you have the right documents ready.

If you want help choosing the right account, see the Money Advice Service’s guide on How to choose the right bank account.

Remember, your account is confidential and should only be used by you (unless you have set up a joint account). NEVER give anyone your PIN number or your card under any circumstance – even if you think they can be trusted.


Overdrafts allow you to draw out more money than you have in your bank or building society account, but it comes at a cost.

  • Although they are quite common, you should think very carefully before agreeing to an overdraft and using it
  • There are hefty charges for going overdrawn, especially if you haven’t agreed to an overdraft with the bank. Charges will vary depending on your bank or building society
  • An agreed overdraft will set a certain level that you cannot go over but will still see you getting charged for using it. Be careful to stay within this limit or the charges could be even higher
  • Some higher education students get interest-free overdrafts and are not charged for being overdrawn, but this is a special arrangement with the bank
  • If you’re likely to overdraw regularly, arrange an authorised overdraft, which allows you to go overdrawn up to an agreed amount. You may have to pay a monthly fee or interest, or possibly both, and you may still be charged a fee for each transaction made while your account is overdrawn. But an authorised overdraft is cheaper than an unauthorised one
  • It is unlikely you’ll be offered an overdraft if you are under 18-years-old
  • To set up an overdraft, make an appointment at your local branch or call your bank or building society. Be prepared to talk about how you plan to repay the overdraft
  • Remember, an overdraft is a debt that you must repay

If you are struggling to get out of your overdraft, talk to the bank about ways you can help or to the Citizens Advice Bureau for advice on managing your debt.

There are also these handy sites providing advice and support for overdrafts and debt:

Citizens Advice on overdrafts

Money Advice Service guide to overdrafts

Debt Advice Foundation

Direct Debit

A Direct Debit is an instruction to your bank or building society to automatically deduct a sum of money from your account to pay an organisation on a regular basis. This will be set up by you and will take out a pre-arranged amount of money on a set date.

It is a common way to pay for bills, charity donations, and insurance or loan repayments.

There are several benefits to having a direct debit:

  • It ensures you do not miss payment dates and incur extra charges
  • It allows you to spread the cost
  • It is safe and reliable and offers a money-back guarantee if anything should go wrong

Before you arrange a Direct Debit, find out exactly how much you will be paying and how often. Sometimes you will pay less overall by paying by direct debit, or you might be paying more. Do your maths and choose wisely. You will also need to find out about the cancellation policy of the organisation you are paying by Direct Debit, in case you wish to cancel the Direct Debit at any time.

A Direct Debit can be arranged by calling your bank or building society. Sometimes the organisation you are paying will arrange this on your behalf with your permission, but always check with your bank what has been arranged before you make any payments.

A Direct Debit can be cancelled by calling your bank or building society. Notify the organisation you are paying of this cancellation. If you are worried about direct debits, talk to your bank or building society or an adviser at the Citizens Advice Bureau, or look at the Money Advice Service site.

Standing Order

A standing order is similar to a Direct Debit. It is an arrangement to transfer money from one person’s bank account to another’s on a regular basis, but it can take up to three or four days for the money to arrive in the new account, unlike a Direct Debit which is instant.

This time is needed to ensure the requested funds are available in your account before they are moved into the payee’s account. Although it is a slower process than a Direct Debit, it will transfer funds faster than a cheque.

If you are using a standing order to pay for bills or repayments, allow at least three to four days before the payment date is due to create the standing order. This will avoid being charged for a late payment if the funds don’t clear in time.

A standing order can be arranged with your bank or building society. Like a Direct Debit, make sure you understand how much and how often your account will be debited.

You can contact the Money Advice Service on 0300 500 5000 (or 0300 500 5555 for Welsh) Mon – Fri 8am-8pm, Sat 9am-1pm. There’s also an online chat function on their site.

Credit unions

Credit unions are a cross between a co-operative and a bank. They are set up by people with a common interest, such as where they live or work, and offer low-interest loans, savings and sometimes bank accounts. They’ve been around since the 1940s but in recent years have become increasingly popular among savers and borrowers.

  • Credit unions have a ‘common bond’ that determines who can join. For example, it could be for people working at a certain company, people who live in the same area or belong to the same organisation, like a church or club
  • Once you are a member of a credit union, you can start on its savings scheme. You can save as much or as little as you like as often as you like. This can usually be paid in at a local shop or collection point, or directly from your wages
  • Credit unions will usually pay a dividend on savings once a year to all its members
  • Life savings insurance is usually included at no cost to the member
  • They can also offer cash-based Child Trust Funds to their members
  • You can also borrow from a credit union. Credit unions act in the interests of all members and so try to ensure they don’t let their members take out loans they cannot pay back by assessing their income and, in some cases, how much they’ve been able to save. There’s also a cap on the amount of interest they can charge on their loans of 3% a month or 42.6% a year APR, which is a lot cheaper than doorstep or payday lenders
  • Life insurance is also built into the loan at no extra cost
  • When you borrow from a credit union, you can also carry on saving. This means that by the time you have finished paying off the loan, your savings will have grown
  • Talk to your local credit union about what is on offer to you
  • You do not need a bank account to be a member of a credit union. In fact, a bill-payment facility is offered by a number of credit unions to enable individuals without bank accounts to benefit from purchasing their utilities cost effectively. Your credit union can also accept payment of your benefits on your behalf if you want. You can then withdraw the cash from the credit union for everyday spending

If you are interested in joining a credit union, find out if the company you work for operates one or ask your local authority for a list of community-based credit unions in your area. To find out where to find your nearest Credit Union, you can check out Credit Unions Wales.

You can also find out more about saving with a Credit Union with Citizens Advice.

If you are concerned about your finances, or are looking for advice, uou can contact the Money Advice Service on 0300 500 5000 (or 0300 500 5555 for Welsh) Mon – Fri 8am-8pm, Sat 9am-1pm. There’s also an online chat function on their site.

Citizens Advice – We give people the knowledge and confidence they need to find their way forward – whoever they are, and whatever their problem.

Money Advice Service – Supporting people’s money management.

The Mix – Essential support for under 25s.