Many people don’t like discussing their finances with a bank. However, having a professional organisation looking after your money is useful.
If you have a mental health problem, especially if you experience low self esteem or are feeling generally low, then talking about money with bank staff can feel particularly difficult. The benefits of having a bank account, however, are very high.
- Your money is in a safe place. If you keep your money at home you might feel anxious about having it stolen.
- You will be able to set up direct debits or standing orders so that your bills get paid on time. This is particularly helpful if your mental health fluctuates or if you have to go into hospital as your bills get paid without you having to think about them. This avoids the anxiety of having financial difficulties to deal with when you’re feeling better.
- Certain utility companies charge you less if you pay by direct debit.
- An overdraft can be agreed with your bank to give you a buffer zone if your expenditure is a little higher than expected every so often. However, if your mental health means that occasionally you go on unplanned shopping sprees, it may be helpful not to have the overdraft option as the temptation to spend might be too great. You may find that you do not want to use an overdraft regularly as they usually charge a high rate of interest.
- You will get regular statements which will help you see where your money is going and will assist you with budgeting.
- You will be able to pay for purchases with a debit card and withdraw money from cash machines. Make sure you choose cash machines that don’t charge you.
Banks are often much friendlier places than they used to be, and many staff are trained to understand disability issues including mental health. Even so, 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.
If you find going into bank branches particularly difficult it may be easier to use online or telephone banking. Your bank will be able to give you the correct phone numbers and internet address.
Different types of bank accounts
Bank accounts are 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.
They come in a number of different forms. The most common are:
Basic accounts. These are designed to be easy to understand and use. With a basic account you can:
- pay money in and take money out
- pay your regular bills
- make purchases using a card
They make it easier to avoid spending money you don’t have as they do not offer chequebooks or an overdraft facility (though some offer a small 'buffer zone').
Sometimes bank staff are not aware of what a basic account is as their bank calls it something different but all high street banks do offer them.
Current accounts. These are the most common type of bank account. They are similar to basic accounts however they may have some additional features including a debit card, chequebook and the facility to arrange an overdraft. Current accounts are usually free, though some offer additional features for a monthly charge, such as travel insurance or a higher interest rate.
Savings accounts. These are designed to help save money for the future. They pay interest on the money in the account at a percentage rate and do not usually offer the services associated with a current account, for example you may not be able to withdraw money immediately without losing some of the interest. Most people with a savings account will also have a current account for day-to-day use. Read more about building up savings.
Post Office Card Accounts. These are designed to only receive benefit, state pension or tax credit payments. No other payments can be paid into it. Money in the account can only be withdrawn over the counter at a Post Office branch.
Finding the right account
There are a number of questions to ask to help you find the right type of account. By thinking about these questions you can make sure you are sure what kind of account you want.
- Is there a minimum amount needed to open this account, or is there a minimum monthly balance needed?
- What are the account fees or other charges? Remember that there are many accounts available that do not charge.
- Am I paid interest on my savings and what are the rates?
- What are my options if I am or have been bankrupt, or if I have a record of bad debts?
- What are my options if I may need someone else to manage my finances from time to time
- Do you offer internet banking and is it free?
- Do you offer telephone banking and is it free?
- Where are your branches located? Make sure that you will be able to get to a branch easily.
- What are your opening hours?
- Am I able to flag this account to look for unusual spending patterns or to prevent it from going overdrawn?
Managing your bank account
After you have opened your account, you are responsible for the money that goes into it and comes out of it. With debit/credit cards, direct debits etc. it can be easy to lose track of your money. Your bank may give you a range of documents that will help you manage your account. It is important to read and keep these. Regular statements are useful to:
- keep track of how much money you are paying out and getting in
- the dates that transactions take place
- any interest earned or deducted
- any penalty charges that are applied
Most accounts also offer an online banking facility that means you can monitor your money whenever you wish. If you do this, make sure that you are accessing the correct website and keep security information such as passwords safe. Remember that your bank will never ask you for your password or security number and emails asking for this are likely to be from criminals. Contact your bank if you have any concerns.
You should contact the bank if you need help to understand any of the procedures or information associated with your bank account.
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. A friend or relative may be able to go through letters with you or be there to support you while you do so.
Your bank will ensure that you are able to access your account. If you have any problems, contact them as soon as possible. For example, if you are unable to use a chip and PIN card, they will be able to arrange for your card to work with a signature.