Choosing the right bank to open a new bank account can be an intimidating task. Whether you're looking to open a current account because you've just relocated to the UK or because you're simply exploring choices to manage your finances, we've got you covered.
In this article, we gathered essential information about the 5 best banks in the UK that would help you choose the one that suits you the best, including a brief overview of the banking system.
We've considered different factors that contribute to a bank's overall rating, including their total assets, the number of customers, monthly fees, customer satisfaction (based on comments on Trustpilot), and the key features of that bank.
Let's begin with an overview of how banking in the UK works.
Brief Overview of the UK Banking System
To ensure you choose the right bank, it is worth taking a look at how the banking system works in the UK.
The UK banking system is a significant part of its financial sector. It primarily consists of commercial banks, international banks, building societies, financial services companies, and online banks. As of 2023, there are more than 300 financial institutions operating in the country.
Banks in the UK offer services such as current and savings accounts, business accounts, overdrafts, loans, insurance, and accounts for international residents and non-residents. Deposits to some types of bank accounts are also protected under the Financial Services Compensation Scheme (FSCS) to a certain limit.
It is normally free to withdraw cash from ATMs using UK bank cards, or you would be informed if otherwise. Moreover, you can deposit, withdraw, and check your account balance at almost every post office across the country.
Usually, opening a current account with a UK bank is free of opening and monthly fees. However, it also depends on which type of accounts or packages you choose.
💡 Did You Know? In the UK, The Financial Services Compensation Scheme provides protection to consumers if their bank, building society, or credit union fails, ensuring that their eligible deposits are reimbursed. However, this protection is subject to certain conditions, and you can check how much of your money is protected on their website.
What Do You Need to Open a UK Bank Account?
In order to open a bank account in the UK, you'll have to provide two documents. The first document is a proof of address, and the second document is proof of identity.
Some banks may require additional documents depending on which type of account you intend to open.
For proof of identity, you could use one of these documents:
- Driver's licence
- Identity card
- UK residence permit
- Biometric Residence Permit (BRP)
You can open a bank account in the UK without being a citizen as long as you provide the required documents. For instance, it is possible for foreign nationals holding a BRP to open a standard current account in most cases.
For proof of address in the UK, most banks accept the following documents:
- Recent utility bill
- Current council tax bill
- Recent credit card or bank statement
- Rental agreement or mortgage statement
However, some banks may have their own list of valid documents as proof of address, so you should always check with the bank of your choice first. Nevertheless, the documents you provide should be recent, preferably from within 3 months, and not expired in order for the bank to verify where you live.
🔍Tip: The proof of address and identity documents requirement apply to both in-branch and online applications.
What Are the Best Banks in the UK?
Like many countries, the UK has major banks that dominate the banking industry.
When finding the best bank to open an account with, you have to consider factors such as opening fees, monthly account fee, interest rate, if the bank provides online or mobile banking, customer satisfaction rate, or other bank policies that fits your need the most.
Some of the popular options are the Nationwide Building Society, Lloyds Bank, HSBC UK, Royal Bank of Scotland, and Barclays, which are frequently considered the best banks in the UK.
The Nationwide Building Society
The Nationwide Building Society is the largest building society in the world, with over 16 million members.
As a building society, Nationwide is a mutual financial institution that operates for the benefit of the members and is also owned by them, not shareholders.
Nationwide has grown significantly since it was founded in 1884. It has over one hundred mergers, including the Anglia Building Society. Currently, Nationwide's headquarters are in Swindon, England.
Like any other bank, Nationwide offers a wide array of services such as current accounts, business accounts, mortgages, overdrafts, loans, credit cards, and insurance.
About The Nationwide Building Society
- Total Assets: 272 billion GBP
- Trustpilot Customer Rating: 1.6/5 (4,988 reviews)
- Employment: Over 17,000 employees
- Customer Base: 16.3 million customers
- Number of branches: 686
Key Features of The Nationwide Building Society
✅ Current accounts, with options for children and students
✅ Business savings account
✅ Online banking
✅ Contactless VISA card
✅ Usually better rates on savings accounts compared to banks
✅ No opening fee
✅ GBP 0-13 maintenance fee per month, depending on the type of account
Lloyds Bank is one of the best choices for everyday banking, with over 500 branches and an extensive ATM network across England and Wales. For customers in Northern Island and Scotland, they can be serviced at Halifax and Bank of Scotland, respectively.
Having been operating since 1765, Lloyds Bank is regarded as one of the "Big Four" clearing banks and one of the largest retail banks in the UK.
The bank started expanding internationally in 1911 under Lloyds Bank International. It also offers account options for businesses in the Channel Islands and Isle of Man.
About Lloyds Bank
- Total Assets: 877.8 billion GBP
- Trustpilot Customer Rating: 1.7/5 (4,089 reviews)
- Employment: 63,000 employees
- Customer base: 26 million customers
- Number of branches: Over 500
Key Features of Lloyds Bank
✅ Account options for personal and business banking
✅ Private banking and international banking services
✅ Mobile banking app
✅ Contactless VISA card
✅ Strong presence in retail banking
✅ No fee on opening and GBP 0-24 monthly fee
HSBC UK is one of the four major clearing banks in the United Kingdom. It is a wholly-owned subsidiary of HSBC Holdings, which is one of the world's largest multinational banking and financial services organisations.
Established in 1865 in British Hong Kong, HSBC Holdings secured a significant presence in the European region after it acquired full ownership of Midland Bank in 1992 and moved its headquarters to the UK in 1993.
It now operates on a global scale, with an extensive network that covers over 60 countries and territories, serving around 40 million customers worldwide.
HSBC UK offers commercial banking products and services, from current accounts, savings accounts, and Global Money accounts to loans, mortgages, insurance, and financial advice services for investments.
About HSBC UK
- Total Assets: 2.966 trillion USD
- Trustpilot Customer Rating: 1.4/5 (8,148 reviews)
- Employment: 219,199 employees
- Customer Base: 40 million
- Number of branches: 327
Key Features of HSBC UK
✅ Current account for individuals, students, children, and business
✅ Multi-currency accounts supporting 14 currencies for personal and business customers
✅ Online banking
✅ Contactless VISA and Mastercard® card
✅ International brand recognition
✅ No opening and monthly fee for personal customers
Royal Bank of Scotland
The Royal Bank of Scotland (RBS) is another major commercial bank in the UK, operating as one of NatWest Group's retail banking subsidiaries.
Its headquarters are in Edinburgh, and it has around 700 branches across Scotland and in major cities in England and Wales. RBS also has 19 “mobile branches,” providing banking services to customers in rural areas in fully-equipped converted vans.
The Royal Bank of Scotland offers a full range of commercial banking services, including everyday bank accounts with no monthly fees, business accounts, mortgages, home and life insurance, and more.
- Total Assets: 782 billion GBP
- Trustpilot Customer Rating: 1.3/5 (807 reviews)
- Employment: Over 71,000 employees
- Customer base: More than 3 million personal customers
- Number of branches: 700
Key Features of RBS
✅ Accounts for individuals and businesses
✅ Online banking
✅ Contactless Mastercard® debit card
✅ Technologically advanced banking infrastructure
✅ No opening fee and GBP0-31 monthly fee
Lastly, Barclays is another bank to consider as it is also one of the "Big Four." The bank has been at the forefront of the UK banking industry since it started operating in 1690.
As a universal bank, Barclays operates and has subsidiaries in 55 locations across the world and approximately 1,500 branches in the United Kingdom. Barclays customers can also access some banking services at post offices in the country.
Barclays offers a full range of financial and commercial banking services, from a standard current account to investment banking services.
- Total Assets: 1.513 trillion GBP
- Trustpilot Customer Rating: 1.4/5 (9,344 reviews)
- Employment: 81,000 employees
- Customer base: 48 million customers
- Number of branches: About 1,500 in the UK
✅ Personal and business bank accounts
✅ Online banking
✅ Contactless VISA and Mastercard®
✅ Large international network
✅ No opening and GBP0-20 (waivable) monthly fee
Alternatives to Traditional Banking
Apart from traditional ways to manage your bank account which usually requires you to contact a physical branch, you might want to look at online or mobile banking alternatives.
While face-to-face human interaction may still be preferred for complex banking needs, online banking provides the convenience of 24/7 money management from anywhere with an Internet connection.
Many banks in the UK, including those listed above, offer digital services through their websites or mobile apps. These online services usually allow customers to check balances, transfer money, and pay bills without having to visit a physical bank.
However, with the emergence of technology, having a virtual bank account with virtual banks such as Revolut, Monzo, or Starling is also a good alternative to traditional banking. This type of bank provides a full range of banking services while operating digitally with no physical branch, which often means less paperwork and reduced fees. You might also want to consider neobanks.
If you are a business registered in Hong Kong, Singapore, or the BVI and are looking to open a virtual account to handle transactions in multiple currencies, you might consider Statrys Business Account as another alternative for convenience.
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