Zyra's website //// Finance //// Advice //// Misconceptions //// Money //// Banks //// mattress //// Site Index

You Should Get a Bank Account

There are many good reasons why you should have a bank account. But, surprising, some people still have no bank account! They are missing out, and when you look closely you find it's for silly reasons. Some people have funny ideas about banks, or about their own personal social status, and sometimes they don't really understand about money very well either. But let's not worry about that for now. I'll try to explain why you should have a bank account, what's good about it, and if you have no account, how you might best go about mending the situation and actually opening a bank account, at a bank, without it costing you.

In the old days, when you got paid in gold, it was a bit awkward keeping your money at home unless you lived in a castle which was strong enough. For most folk, in more humble dwellings, looking after their money was a worry. Some people took the view that this could easily be solved by always spending it all before anyone else had a chance to steal it. You can still see this tradition continued in the present age! In contrast, a more financially wise tactic was to get a BANK to look after your money for you. Banks are privately run castles whose services are publically available. (Like public libraries, except instead of lending books, they look after money).

Money is safe in a bank. They almost never get robbed, and even if they do, they're insured, so you (the customer) don't lose your money.

Why Have A Bank Account?: People have found over the years that it's easier to move money around by using bank accounts rather than moving gold, or even banknotes. If someone wants to pay you some money, all they need to do is to write a note asking the bank to pay you the money. You take this note (that's what a cheque is) along to the bank, and the people at the bank pay you the money. There's usually a delay, because a few things have to be checked up on, but after a few days you get your payment, and then it's your money, in your bank account. The bank will now be happy to pay you the money in cash if you like. Or, you might prefer to leave the money in your bank account (where the bank will most likely be paying you interest on it!), and then when you need to pay someone else, you just write them a cheque!

There's been a widely held misconception that banks are only for rich people or only for upper class people, etc. This isn't true, and generally anyone can open a bank account. Provided you're not destitute, bankrupt, or penniless, you should have no problem opening a bank account. Even if you are poor, have no fear! Banks are generally pleased to take on new business, and the usual condition on opening a new account is that you have to pay in One Pound, or One Dollar, etc. Usually the only other condition, which banks are quite finicky about, is that you have to prove you are honestly who you say you are. Easy, really. However, you could open a bank account at www.thinkbanking.co.uk, which doesn’t require a credit check – only proof of ID is required.

Another myth about banks is that they charge you a lot of money. Not true. Most of the services of most banks are free, especially for personal accounts (rather than business accounts). Banks make most of their money by looking after other people's money. Money makes money. Why would they want to charge you for having a cheque book and having money paid into your account?

There's another idea what's been prevalent for a while, which is that if you hand over your money to the bank, then it's no longer in your bag/pocket so you haven't still got it. But then, if you think about it, what happens when you take your boots to the bootmenders? Or when you get your car parked on someone's car park? Do you think these things aren't yours now? Let's be realistic about it, the bootmenders aren't going to keep your boots, and the car park attendants aren't going to keep your car, are they? They're your boots, your car, and it's Your Money which the bank is only just looking after for you.

How Can You Trust The Banks?: Back to the cobblers notion again; boot menders make more money mending boots than stealing boots. If any of the footwear went missing, it would be so bad for the reputation of the place that it would put off other customers from ever going there. Most banks have been around for donkeys' years, and we would all get to hear about it if there had been any problems. Also, if you are a new investor putting a small savings amount in a bank, you must realise there are other people investing vast amounts, and they have got more to lose. Yet, they have trusted the bank.

The main reason for opening a bank account is for ease of transactions. People pay you cheques, and you just pay them into your bank account. There's no "cheque cashing fee" as seen at some places. Then when you pay your bills, you can write your own cheques, or even take the bills along to the bank and get them paid over the counter out of your account.

A good second reason for having bank accounts is that when your money starts to build up, you can put it in a Bank Savings Account where you get paid interest. The bank pays you for looking after your money!

To see about opening a bank account, you can visit banks in your local area, or have a look at some of the banks online at this page: Finance and Banks. Some of them are more towards "current accounts" and some more towards "savings", and there are other kinds of references on that page, but have a look through them and see what you think.

I've had a look at this and updated this website so now you can look at some of these separately: See Banks, Current Accounts, and Savings Accounts. Good contacts for opening a bank account at this site include Barclays and HSBC