Before you move to the UK, you might want to get your financials in order, and in most cases, this means getting your bank account set up. You cannot do much without a bank account, even with your expat status, and this is why we are here. In this article, we’ll review and recommend some of the best banks for you to put your money in or at least pay your bills from. Whether you are looking to relocate to Wales, Scotland, England, or Northern Ireland, these banks would be the best place for you to start.
But before we check out some of the leading banks in the UK, let’s take a look at some of the fundamental features of the UK banking scene. And with the UK regarded as the global financial centres of the world with financial services sectors featuring international banks, private UK banks, as well as the publicly-owned lending institutions along with credit unions and building societies, not to mention a total of 344 banks across the UK, it’s clear that choosing the right bank that fits your expat needs might not be the easiest thing to. We’ll help you though.
Reasons Why You Need a Bank Account in the UK
Although it isn’t a legal requirement to have a bank account in the UK and that you will find many British residents without bank accounts given the options available on the financial market such as credit unions, building societies, and even the National Savings & Investment Accounts, we recommend that expats find the best banks to put their money or run transactions from.
A bank account would make it a lot easier for you to pay your utility bills. Also, if you wish to get a mortgage and the mortgage application approved, you might be required to have a bank account. The good news is that there are several banks that offer basic bank accounts, which you can open even with bad credit. Therefore, you don’t have a reason not to have a bank account.
But before you open your bank account, there are several things you should do before you open that bank account or even choose the right bank or you.
In case you moved to the UK before opening your bank account, you should know that you could manage all your finances from an overseas account, as long as you have a credit or a debit card. Your Visa or MasterCard debit or credit cards will serve you just right. So, why bother with a bank account when you could use your credit/ debit cards? Well, the primary reason why you need a UK bank account is that the Visa, American Express, and MasterCard cards often incur very high transaction fees, as well as currency exchange rates.
Setting up your bank account in the UK
You have more than one option when it comes to bank account opening and bank selection. However, one of the most common approaches you could try involves working with your home bank (or the bank in the country you currently live in) and having the home bank liaise with the UK banks to open the UK bank for you.
But if this option doesn’t work for you, you could find the best UK bank for you and then have them set up an account for you. Most of the UK banks have access to international accounts, including accounts for non-residents, and the banks could use this link to set up an account for you. The best bit about this approach is that you can open your UK bank account in advance/ before your move. Before the bank transfer processes kick in, make sure that that monthly fees for the new accounts work for you.
Lastly, don’t open a bank account in the UK or in any other country many months in advance because you will incur hefty charges.
UK’s Banking System
Like any other country you visit, different banks offer different features, which means that one bank might not fit your needs. With this in mind, you need to keep the following in mind.
The high-street banks also offer services to the general public. But the services offered often charge more in fees
For investment banking services, find the best financial institutions reputable for investments like stocks and bonds.
Types of Bank Accounts to Open in the UK
In your search for the right bank, you also need to identify the type of bank account that best suits your needs. The main types of bank accounts are discussed below:
Basic bank account – a basic account is one of the most common types of bank accounts in the UK. It’s a free account, and it’s ideal for persons with rather poor credit or even people struggling to open or keep current accounts. Some of the features of this account include the Visa Electron debit card and the direct debit payment option. However, this account doesn’t give you access to loans, credit cards, or overdrafts. Essentially, this is the best bank account for anyone who needs a simple banking system as they wait for things to change, from where they can open a current account. Note that you can only open a current account if your credit check details check out.
Current Account – current accounts are standard and basically the most common type of bank account that you can open in the UK. You can use your current account to pay your bills, receive your wage payments, or even shopping. The current accounts are low-cost bank accounts, and the account could be free in some banks. With a current account, you will have access to a debit card, credit card, as well as access to overdraft facilities. You should also know that most of the banks in the UK offer specific versions of the current accounts to students or younger folk.
Savings Account – if you’d like to save as much money as you can, a savings account could be a good place to start, especially if you wish to keep your money for a short duration. There are different types of savings accounts, but if you wish to enjoy the benefits of the high-interest savings account, you’ll have to invest a higher minimum deposit and also specify how long you want to keep that money out of reach. Savings intended to last a long time earn higher interests.
Digital/ Mobile accounts – if you fancy banking from your smartphone or any other mobile device, the UK banking sector has different digital banking options you could try.
The other accounts are joint accounts and non-resident/ international accounts.
Leading UK Banks for Expats
Lloyds is the biggest retail bank in the UK, offering a total of 8 current standard accounts, classic accounts, a basic account, an under 19s account, and also a students’ account. Lloyds offers platinum accounts that come with insurance benefits, in addition to credit interest offerings of £19 each month. On top of these accounts, Lloyds also offers 2 international accounts that are fit for non-residents, as well as the individuals going overseas or trying to access the overseas markets. Regarding savings accounts, the bank offers 12 local savings accounts, as well as 4 international multi-currency savings accounts.
If you have a minimum income of £25,000 as the account balance, Lloyd will give you free international money transfers.
Barclays bank is one of the largest and also the most accomplished bank in the UK. Barclays offers the widest range of high-quality financial services that suit the needs of individuals, as well as businesses.
Generally, Barclays offers three standard transactional accounts – the standard current accounts, basic accounts, and premium account, but if you are interested in a student account or an account for the children, you will have the accounts set up too. If you are interested in investing or saving, you might like Barclays’ portfolio of good savings and investment accounts, including the ISA account.
In addition to the bank accounts, Barclays Bank also offers a foreign currency account with 12 foreign currencies offered.
You might also enjoy the range of mobile and online banking options, as well as the fact that you can customise your online account for a small fee, while also choosing from the tech and the travel packs.
Next to Barclays, the other big name in the UK banking world has got to be HSBC. HSBC is one of the Big Four multinational banks. It has branches in more than 80 countries, and this global reach is the main reason for HSBC’s popularity with the expats getting into the UK and most other countries in the world.
Besides the global reach, HSBC offers a wide range of products, from the best borrowing options to mortgage, investment, and even insurance options. Like Barclays, HSBC offers free current accounts, but the difference between the two is that HSBC has more current accounts – eight to be specific. These current accounts include the basic account that has a daily cash withdrawal limit of £300 and the premier account that comes with the best perks, including travel insurance applicable worldwide. This bank also offers account options for students, children, or graduates.
Regarding savings accounts, HSBC features 9 savings accounts that fit the needs of different people. The savings accounts include the Children’s saver, as well as a help-to-buy savings account that would help you save for your first home. The saving/ investing options also include the tax-free cash ISA account.
When it comes to the international services offered by the bank, you get to enjoy the bank’s free foreign current account that is available in 14 foreign currencies. They also offer an overseas non-resident account which is available and accessible in 37 countries. You might also like the low-cost payment options applicable to international payments.
HSBC also comes with an HSBC app that allows you to access and meet all your banking needs on the go.
If you are looking to bank with one of the newer and smaller UK banks, then Metro bank would be a great start for you. Metro Bank first opened its doors in 2010, and today it boasts 67 branches throughout the UK.
The biggest selling points of Metro Bank include: all its branches remain open for 7 days each week, they are all easily accessible, and you don’t need to book an appointment to see a financial adviser.
But Metro bank is not perfect. Despite the access and convenience, you’d enjoy, this bank offers fewer options for account types. There is a free standard current account that’s free to all UK residents. This account offers free cash withdrawals for overseas transactions.
The basic account has a daily withdrawal limit of £300, and you might also like their (4) options of savings accounts that include the instant access savings account and the fixed-term savings account. There also are cash ISA accounts.
NatWest is a UK bank that’s well-designed for expats, as well as the foreign nationals residing in the UK. The bank offers a good number of bank account options that accept trading and transactions in local and foreign currency. The bank is ideal for expats earning at least £40,000 annually.
The other bank that works well for expats is the Royal Bank of Scotland.
Opening a Bank Account
Setting up a bank account in the UK is no longer as complicated as it once was, and you can now open a bank account with any of the leading UK banks with ease.
The other impressive bit is that you can open a bank account without an address in the UK. This is an excellent option for expats who’ve just arrived in the UK. Besides your passports and birth certificates, you might also want to have a tenancy agreement/ mortgage statement, recent credit card/ bank statements, or council tax bills to open a bank account if you don’t have a home address yet.
Finally, you should always work on building good credit before you travel to the UK or as soon as you get there. Your access to money might be an issue if your credit score numbers are bad.