Costs & Charges
If you are opening your first UK bank account, to facilitate payments and withdrawals, you will probably open a current account. You can access, deposit and withdraw money at any time, depending on your current cash flow, and the account does not usually cost anything to open. Basic UK bank accounts rarely cost anything to open or maintain. If you are offered a current account by a bank or building society but would be required to pay for the account, it is best to research other accounts from different financial institutes; you should find an account which does not charge you any initial administration fees.
You will normally be required to deposit money at the bank or building society in order to open an account. However, you can often open an account with as little as one pound to deposit. Some financial institutions prefer you to pay a deposit in cash when you open the account, whilst others will allow you to transfer money into your new account at a later date.
Basic, simple accounts rarely incur administration fees. The more special features that your account offers, the more likely you are to be charged for particular services. Some banks and building societies will offer new customers an overdraft facility, or a credit card. These features typically incur charges. Unarranged overdrafts will typically cost you a one-off authorisation fee, and the withdrawals you make from your overdraft will also be charged: sometimes per transaction, sometimes per day. If you use a credit card, you will be charged interest on those transactions you make. For more details see overdrafts and credit cards.
Even if you are required to pay certain charges for your UK bank account, it is typically a better financial option than to continue to use your foreign bank account for an extended period of time. Many financial institutes charge you money for making cash machine withdrawals in other countries, and all banks and building societies will charge their customers if they wish to transfer large sums of money between international accounts. If you choose to pay accommodation charges or student tuition fees from a foreign account you will be liable for the cost of currency conversion and for any one-off administration charges made by your bank or building society for completing the transaction. You will typically pay a lot more for an international transfer than you need to pay, as a result of the banking charges, although exact costs will vary depending on the bank you use.
However, if you are planning to stay in the UK for only a few months, you may find that the administration involved in opening, and later closing, a UK bank account, exceeds its usefulness. In this case you should be prepared to cover the cost of any international administration fees and transfer charges, if necessary.
