Session 3: Opening and using a bank account

Banks provide a variety of very useful services to their customers. One of these services is a bank account.

Below is a list of benefits of a bank account.

Click on each number to learn more.

Debit cards

A debit card is linked with your bank account. So, when you use your debit card to make purchases, you are basically spending the money you have in your bank account.

When you are legally an adult (18+), your debit card provider may offer you an overdraft facility. An overdraft facility allows you to make small purchases when you do not have enough money in your account.

However, it is very important to note two things:

• First, you have to pay back the money that you used from the overdraft facility.

• Second, banks normally charge a very high fee and/or interest rate when customers use their overdraft facility.

So, try to avoid using an overdraft unless it is an emergency.

You can open an account with a bank (or with a building society).

To open a bank account, you will need to fill in an application form.

You will need to check whether the bank requires you to complete the application form online or in a branch office.

You will need documents to prove your identity and your address to open a bank account. If you are not a British citizen, then you may require additional documentation to open a bank account.

Most banks provide bank accounts to children aged 11 or older. If you are under the age of 16, you will need your guardian or parent, who must have an account with the same bank.

Bank accounts tend to be very sticky in the sense that people usually do not change their bank accounts for many years (some keep the same bank account their whole life).

At this stage, you may have to open an account in the same bank where your guardian or parent has an account. However, when you are able to open an account without your parent or guardian, then make sure that you compare the benefits of bank accounts offered by different banks.

For example, bank accounts may differ in terms of interest rate or overdraft facility (again, avoid overdraft as they could be very costly). Moreover, some banks may offer perks like shopping vouchers and a small cash bonus.

Most accounts include apps that help you with your monthly budgeting. Some apps may also offer free financial education or tips to manage your money.

Moving on

 

When you are ready, you can move on to Session 4: Savings account.

 

Grateful acknowledgement is made to the following sources:

Every effort has been made to contact copyright holders. If any have been inadvertently overlooked the publishers will be pleased to make the necessary arrangements at the first opportunity.

Important: *** against any of the acknowledgements below means that the wording has been dictated by the rights holder/publisher, and cannot be changed.

Images:

565849: Image: Tablet with banking app: moloko_vector / Shutterstock

566066: Image: Credit card: Top Popular Vector / Shutterstock

565850: Image: Bank vault with gold ingots: klyaksun / Shutterstock

565851: Image: Woman with banking app: mentalmind / Shutterstock

565896: Image: Paper plane: Wirestock Creators / Shutterstock