If you have a mental health problem, especially if you experience low self esteem or are feeling generally low, then this task can feel particularly difficult. The benefits of having a bank account, however, are very high.
Banks are often much friendlier places than they used to be, and many staff are aware of disability issues including mental health. Unfortunately this isn’t the case with all banks. You might decide to take a support worker or trusted friend with you when you go to a bank to open an account, to help you feel more confident.
If you feel that one bank is unfriendly towards you, you can always choose another one as long as there are several in your area. There is also the option of online and telephone banking which would mean that you wouldn’t need to visit a physical bank.
To find out how to bank by phone or online type ‘telephone banking’ or ‘online banking’ into your internet search engine or look in Yellow Pages.
Possibly the main financial service you will use is a bank account to have somewhere safe to put your money, receive payments such as wages or benefits, manage your money, pay bills and make purchases in shops or online.
Bank accounts come in a number of different forms:
There are a number of questions to ask to help you find the right type of account.
You will need to prove your identity and your address, so bring along a passport, driving licence and household bill. It might help to write down any questions you might like to ask, or anything that you need from your account (eg a cheque book, if that is important to you) to help the bank determine the best account for you.
To open a bank account you will need to prove your identity. The documents required vary with different banks but they usually ask for:
Some people think that if you have mental health problems, particularly if you have received a diagnosis, you cannot have a bank account. This is not true.
If you need help or do not have the capacity to make decisions for yourself you may be able to get someone to open an account on your behalf. More information on Giving financial control to other people is available in the Mind booklet Looking after your personal finances.
After you have opened your account, you will need to manage it to keep up to date with what is happening with it. Your bank may give you a range of documents that will help you manage your account. Your bank will provide you with regular statements, either through the post or online, which you can use to keep track of any activity on your account, for example the amount of money coming in and going out, and the dates on which these transactions take place, any interest earned or deducted, penalty charges applied and other services.
Most accounts also offer an online banking facility that means you can monitor your money whenever you wish. If you decide to do this, you should take precautions to make sure that you keep your information safe to protect you from identity theft and fraud.
You should contact the bank if you need help to understand any of the procedures or information associated with your bank account. If they are unwilling or unable to help, you can get advice from one of the organisations listed under Getting help.
Sometimes anxiety and stress can affect your ability to manage your bank account. For example, you might not want to open letters from your bank or communicate with bank staff. It is important to seek help if you are finding yourself being overwhelmed because otherwise these small issues can spiral into larger ones.
You may need someone to manage your account on your behalf if you do not have the capacity to make decisions for yourself.
In conjunction with APACS, the UK Payments Association, Payments Council has produced a guide to payments and accessibility. The main aim of the release and guide is to make people aware that chip and signature cards are an alternative available to those who are unable to use chip and PIN cards. A text only version of the guide is available.
A credit union could be a friendlier and more relaxed alternative to using a bank. This might appeal to you if you have mental health problems and find dealing with banks too daunting. You can pay into credit unions at convenient local shops or collection points or directly from your wages.
Credit unions are financial cooperatives owned and controlled by their members. They offer savings and good value loans plus they are local, ethical and know what their members want. Many credit unions now offer a range of services including a current account, benefits direct, ISAs and Child Trust Funds.
Each credit union has a "common bond" which determines who can join it. This determines who can become a member of the credit union. The common bond may be for people living or working in the same area, people working for the same employer or people who belong to the same association, such as a church or trade union.
If you visit the Association of British Credit Unions Ltd's (ABCUL) credit union search section you can find out what services your local credit union can offer you.
You can learn more about the work credit unions are doing around the country by downloading the latest edition of Credit Union News on ABCUL's website.
You can save as much or as little as you like, weekly, monthly or as often as you wish. You can pay in at convenient local shops or collection points, or direct from your wages.
Credit unions aim to pay a dividend on savings once a year to all their members. This can be as much as 8 per cent of the amount that people have saved, but is typically 2 or 3 per cent.
Life savings insurance is included, at no cost to the member, making it easy to build up a useful nest egg for you and your family. On a member's death, the amount of savings can be as much as doubled by the insurance and paid to whoever the member chooses (subject to conditions).
There have recently been many concerns about the low number of people who are saving; credit unions make it easy to save and even a small amount each week will soon mount up.
Investments in local credit unions, means that neighbours or colleagues are benefiting. Credit unions keep money within a community, because there are no outside shareholders to pay.
Credit unions can also offer cash-based Child Trust Funds to their members.
Most credit unions loans will cost you no more than 1 per cent a month on the reducing balance of the loan (an APR of 12.7 per cent). What this means for example is that if you borrowed £1000 over 1 year, you would repay no more than £1067 in total. Many credit unions charge less, some may charge more but by law this cannot be more than 2 per cent a month on the reducing balance (an APR of 26.8 per cent). You can find out about what loans and interest rates are on offer at your local credit union by contacting them via the credit union search section on the ABCUL website.
Credit union loans come with no hidden charges and no penalties for repaying the loan early. Life insurance is built in, at no cost to the borrower, so if you were to die before you had repaid the loan, insurance would repay the loan for you.
When you borrow from a credit union, you may carry on saving, meaning that by the time you finish repaying the loan your savings have grown as well. You can work out how much a credit union loan could cost you by using ABCUL's Loan Calculator.
Most credit unions can lend for up to 5 years (unsecured) and up to 10 years (secured). Some credit unions can lend for up to 10 years (unsecured) and up to 25 years (secured).
For more information on credit unions get a free copy of the Financial Services Authority (FSA) credit unions printed guide No selling no jargon just the facts about credit unions.
Information on this page courtesy of Association of British Credit Unions Ltd (ABCUL)
You can find information about banking services local to you by using the telephone directory or the internet.
More information about bank accounts is available at Money Made Clear from the Financial Services Authority.