What to know about basic bank accounts

Find out if a basic banking account is the right type of account for you.

09:23 28 September 2013

There are many different types of banking accounts available to consumers, each with their own benefits and drawbacks. Many people may opt for a basic banking account, or may only have the option of a basic banking account due to credit rating. Here are just a few things to know if you decide to go with a basic banking account.

• Less paperwork—one of the benefits of a basic banking account is the ability to have wages, pensions, benefit funds and other regular payments deposited into the account directly without delays or travelling to branches to manually make a deposit.

 

• Accessibility—even a basic banking account will give you the option to have a bank account card which you can use to access funds from approved ATMs. This is important if you typically work during banking hours but still need access to your money.  A debit card is also excellent for those who do a lot of travelling.

 

• Predictability—a basic banking account is fairly easy to keep track of because you only have the funds available which have been deposited. There are no loan options to keep track of, but if you do spend more than what you have in your account you could be assessed steep fees.

 

• Limitations—some basic banking accounts have limitations. Certain banks may only give an ATM card and not a cheque book, while others may only give a cheque book and no ATM or debit card. Some banks may even prevent you from setting up bills on automatic payments.

 

• Comparisons—compare basic accounts, along with other account options that might pay interest or provide overdraft features.  There are also Post Office card and “jam jar” accounts.