BANK ACCOUNT

If you are only in the UK for less than 6 months, you may find it easier to keep your money in an account in your home country (using travellers' cheques, bank transfers, credit cards and cash machines to access your money). If you are staying in the UK for more than 6 months, it may be useful to open a UK bank account.

Advantages of having a UK current (checking) account:

• Paying bills
  Many landlords prefer to collect rent directly from a bank account (through a regular payment known as a "standing order")
  You may be able to obtain cheaper services if you pay bills by direct debit from a bank account, eg telephone/gas/water/electricity
  If you are given a chequebook, you can also write cheques as a safe way of paying for things
• Cash
  You can easily obtain money from cash machines or from a bank, or pay directly from your account using a debit card
• Saves money
  It is generally cheaper to use a UK account rather than paying by credit card or withdrawing cash from a foreign bank
• Employment
  If you work in the UK, some employers require you to have a bank account so that they can pay you.

Advantages of having a UK deposit (savings) account:

• Earns Interest
  You can receive a higher rate of interest on a deposit account. For example, if you have an average of £5,000 in your account for 1 year and you earn an extra 3% interest on this money for 1 year, you will receive extra interest of £150. If you have only a small amount of money, it may be simpler just to open a current account.

One idea is to transfer all the money you need for your stay when you open your account. It is cheaper to make one transfer instead of many smaller transfers. Another advantage is that you will not have to worry about the risk that during your stay there is a sharp fall in the value of your country's currency or a sharp rise in the value of the British pound. You will not benefit if your currency strengthens or the pound falls, but you can be confident that you will have enough money to be able to stay in the UK as long as you planned. Put most of the money in a deposit account, earning interest. Each month, transfer enough money from your deposit account to pay for all your living expenses, being careful not to keep enough money there to prevent your account's balance becoming negative (otherwise you will have to pay overdraft charges).

CHOOSING A BANK

Who can you ask for advice?
Your school may have a welfare officer who can suggest which local banks are most helpful to international students, and what documents they require to open an account. You should ask your classmates or friends about their own experiences.
If you are studying at a university, there may be a financial adviser who could give you free advice about loans, bursaries, budgeting, benefits or taxes. This person may be a member of NASMA (the National Association of Student Money Advisers)

What are the names of the UK banks?
UK banks include the following:
NatWest - http://www.natwest.com
Royal Bank of Scotland - http://www.rbs.co.uk
HSBC - http://www.hsbc.co.uk
Barclays - http://www.barclays.com
Lloyds TSB - http://www.lloydstsbgroup.co.uk
Halifax - http://www.halifax.co.uk
Bank of Scotland - http://www.bankofscotland.co.uk
Abbey National - http://www.abbey.com
Cooperative Bank - http://www.co-operativebank.co.uk

How quickly can I open an account?
For security reasons after the terrorist actions of September 11th 2001, it is unlikely that you will be allowed to open an account in the UK before you arrive. After you have arrived, it may take a short time before you have collected the necessary documents and visited the bank, and it might take a couple of weeks before the account is ready to be used and before any transfer of money from your country has been completed. In total, after arriving in the UK it might take a month before your account is ready (if you are allowed to open an account). If you need to pay for a course or accommodation soon after you have arrived in the UK, ask for advice about the different ways of paying.

Will the bank allow you to open an account?
If you are an international student you may find the process of opening a bank account more difficult than you expect. This is because there are strict laws in the UK which are designed to prevent money laundering (hiding money obtained from drugs or other illegal activities) or terrorist activity. In particular, you need to prove both who you are and where you are living. You should read the "opening an account" section below carefully.

What types of accounts should you consider?
(1) Current account
Bank staff will often encourage you to open a current accounts which charges a monthly fee and provides extra services. Only open such an account if you really need these services. There is usually a cheaper basic current account which is available as an alternative. Before opening a current account, check the fees which may affect you, for example if there are any charges for withdrawing money from a cash machine, or how much it will cost if the balance in your account becomes negative (overdraft charges).
(2) Branch-based deposit account
Branch-based deposit accounts offer higher interest rates than current accounts (because you have fewer services and less access to your money).
(3) Postal or telephone account
Postal or telephone accounts offer higher interest rates than branch-based deposit accounts (because you cannot use the services in the bank's branch). You will have to write or telephone to withdraw money from these accounts.
(4) Internet account
Internet accounts often offer the highest interest rates (because they are much cheaper for the bank to run). It may also be easier to keep track of this account when you are not in the UK. Some of these accounts allow you to withdraw money using a cash machine, while others will only allow money to be transferred to a bank's current account (this may take several days). Although they often have different names, the internet accounts are usually run by a major bank or insurance company (for example, Egg is run by Prudential Insurance, Cahoot by Abbey National, IF by Halifax).

How can you compare the interest rates?
You can compare the interest rates at different banks using the MoneyExtra website:
Current accounts: http://www.moneyextra.com/compare/current
Deposit accounts: http://www.moneyextra.com/compare/deposits
Make sure that you understand which services are offered for the accounts which are shown, so that you can compare them properly.
Remember that interest rates can change quickly, and check that the interest on your account remains competitive after you have opened it.

Other things to consider when choosing a bank branch for a current account
Does the bank have a branch close to your home and close to your school or workplace?
When is the bank open? Many branches are open from 9am to 4:30pm from Monday to Friday; some branches open on Saturday mornings
Can you use your local branch, or are you only allowed to deal with a particular branch, on the telephone or through the internet?
Can you use the cash machines of other banks?
Does the bank provide foreign exchange or international money transfer, and if so what are the charges?
Does the bank have a special student adviser (most common in branches near a university)?
Will you be able to obtain an overdraft if you need to borrow money for some reason; if so, what are the charges?

OPENING AN ACCOUNT

To open a bank account you will need first to collect some documents to prove who you are:

Identity
To prove who you are, you need an official document which includes a photograph. Your passport is probably the best example.

UK address
You need to prove where you live in the UK. There are strict laws which make it difficult to hide money which has been obtained from crime or terrorism, but which also make it harder for foreign students to open bank accounts in the UK. Check carefully with a bank exactly what it requires you to do to open an account - this will save you a lot of time. Many international students do not have any of the usual documents which are accepted - for example: a UK driving licence, or a utility bill (for gas, water, electricity or telephone) in your name.

The best way to overcome this problem is usually to ask your school if it has an arrangement with a local bank branch, and to apply to this branch. You will need to ask your school for a letter confirming that you are studying there and stating your address (this letter should be written on the school's official notepaper).

Most banks will accept some alternative proof of address, but the policy may vary from one branch to another. A survey of some bank branches in April 2004 revealed that each one had different requirements:
- one required a statement from your bank in your home country (written in English), showing your bank balance over a period of at least 3 months, and sent by the bank directly to your address in the UK
- one stated that an NHS medical card would be accepted (you can receive one of these after you have registered with a British doctor;
- one said that a letter from your landlord would be accepted, provided that he/she has an account at the same bank (the letter needs to confirm the landlord's bank sort code and account number, and must state where you are living)
- one said that an offshore account could be opened, requiring proof of your foreign address and confirmation that you are not a UK resident

It may be helpful if you take with you some additional evidence of where you live. Your accommodation contract (assuming that it is a typed, official document) and your National Health Service medical card may be worth taking with you if you have them.

Home country address
To prove your address in your home country, take a document with your address. If possible, the address should be written using the Western alphabet so that an English person can read it. Examples of suitable documents are:
- A letter of acceptance from your school, if this was sent to your permanent address in your home country
- A statement from your bank in your home country
- Your passport (if your home address is shown)

Student status
If you are studying at a UK university for over a year, you may be offered a student account (these may be offered only between August and November, because the academic year starts in September in the UK). A student account may offer you lower charges and there may be some special offers. To prove you are a student, take a letter from your school which states the dates of your course.

Your credit record
If possible, ask your bank for a reference letter from your bank in your home country, written in English.

Sources of income
The bank may want to know how you are financing your stay in the UK (for example, from your own savings, from your family or from some other sponsor or scholarship).

The processes required to open a current account in a bank branch are as follows:

1. Go into the branch you have chosen and tell the information desk that you would like to open an account. You may want to ask a British person you know if he/she can go with you to help you (especially if your English ability is intermediate or below)
2. You may then be asked to complete a form before the interview: ask the information desk for help if you do not understand any part of the form
3. You will be interviewed by an account manager, who will decide if you can open an account
4. You will be asked for personal details such as your date of birth, your home address, your address in your home country, whether you are married or have children, when you came to the UK, when you expect to leave, your course or work, your income (or source of funds, eg parents) and your expenditure.
5. You will be asked to provide a sample signature; if you sometimes use an English and a non-English signature, you may be asked to provide a sample of each
6. You will be asked to sign a form so that the bank can check your credit history and keep your personal details on their computers. If you do not want to receive mail from the bank advertising their services, there should be a box that you can mark.
7. You may also be given a form to allow you to receive interest without tax being paid ('gross interest'). Someone who does not normally live in the UK (a person who is "not ordinarily resident" in the UK) can usually receive gross interest.
8. You should make sure that it is clear to which address your chequebook and cards will be sent, and how long this is expected to take. You may be asked to collect these from the bank branch.

Be careful to try to avoid some problems that sometimes occur when foreigners try to open an account, for example:

- First name and family name the wrong way round
- Cards and chequebook sent to the address abroad, instead of your UK address or the bank branch
- Note that it takes time (usually between 1 and 2 weeks) before the account becomes active
- The bank cannot open an account because you have no proof of your address

After you have opened your account, you will receive several different letters by post: confirmation of your account details, a chequebook, a paying-in book, your bank card, and the PIN (personal identification number) for your bank card.Do not write down the PIN or keep it together with your card.

It is common for a card to allow you to withdraw £250 per day.
If the card is stolen and used by the thief, you may have to pay the first £50 lost, or the full amount if you have lost the card and a note of your PIN at the same time
Statements will probably be sent to you monthly; you can also find your balance using a cashpoint machine.

UKCISA produce a guidance note for students on "Opening and running a bank account in the UK". You can access this from the page: http://www.ukcisa.org.uk/student/information_sheets.php .

TRANSFERRING MONEY FROM ABROAD

It is not safe to send/receive cash by post, because this could be easily stolen or lost.
These are some safer ways to transfer money from one country to another:

Electronic transfer of funds to your UK bank account ("sending money by wire")
Quick, but expensive
There are usually three types of transfer, depending on how quickly you need the money:
An urgent transfer (the most expensive)
A standard transfer
A relay transfer (the cheapest)

Banker's draft
A banker's draft is a document drawn up by the bank in your home country
You can carry this with you to the UK, or ask for them to send it to your UK address
You present the draft to your bank in the UK
If the draft is in Sterling, it will be credited to your account quickly and there will not be a handling charge

Cheques
A slow method; cheques may take several weeks to clear

Credit card
Withdrawing money from your credit card can be expensive because of high interest charges

Traveller's cheques
Keep a record of the numbers of traveller's cheques and credit cards in case of loss or theft

Other international money transfer services
International money transfer services are also offered by MoneyGram or Western Union.
Compared to a bank transfer this can be a more expensive and less secure way to move money, but it is useful if the sender or receiver doesn't have a local bank account.
To make a transfer, in one country the sender pays money to a local MoneyGram or Western Union agent, shows identification, and says who will receive the money and where it will be collected. The sender is given a reference number and must tell this to the person who will receive the money. The receiver goes to the agreed location, shows identification and quotes the reference number, and can then receive the money. There are limits on how much money can be transferred in this way. It is important to make sure that you know what identification is required and that you keep your reference number private.

Exchange rates
To find the current value of 1 pound in units of your currency, click on the Currency Converter.

MANAGING YOUR MONEY

Travellers' cheques
Keep a record of the numbers of travellers' cheques and credit cards in case of loss or theft.

Documents
Keep your bank statements, water/gas/electricity/telephone bills, rental agreements, as well as any correspondence with your school, bank or immigration authorities (keep a copy of any application forms you send). For example, these documents may help you to open a bank account or to apply for an extension to stay as a student in the UK.

Budget
Budget carefully; keep a detailed record of your expenditure and income.

Financial difficulty
- UKCISA also produce a range of helpful guidance notes which you can access from the page: http://www.ukcisa.org.uk/student/information_sheets.php .
There is a guidance note on "Financial hardship". Some people may be allowed to claim money from the government (welfare benefits). See the guidance note on "Welfare benefits and international students".
- If you think you may need to borrow money from the bank, talk to your bank manager and school as soon as possible.
- If you are allowed to work in the UK, you may consider looking for a job.
- You may need to move to cheaper accommodation or to a cheaper part of the UK.

Safety
To avoid having money stolen from you:

- Keep your personal number private. Do not write it down, and do not tell anyone. If you lose your number and card together, you will not be able to recover any money that is stolen from your account. When you enter your personal number, stand in front of the machine and make sure that nobody can see the numbers you are typing. If someone is standing close behind you, ask the person to move. It may be safer to use machines inside bank branches and to avoid machines in busy areas (for example in stations and airports).

- Do not let anyone distract you before you have taken your card from the machine (for example, by talking to you, touching your shoulder, or dropping money); this may be done by a thief working together with a second person, who may take the card from the machine when it comes out. Do not let a stranger help you to use the machine, even if the card is kept.

- Only carry small amounts of cash with you; use cards or cheques to pay for larger bills. If you think your card may have been lost or stolen, report this immediately both to your card company and to the police; if a bank is open nearby, it may be able to give you advice.

- Check the daily withdrawal limit for your card. If it is high, make sure that your bank or insurance company will pay back any money stolen if you lose your card

- Do not use a machine that appears unusual in any way (for example, a machine in a strange location or with unusual instructions

- Be careful to make sure that you are not followed after taking money from a cash machine. A thief may have seen where you have put your wallet and may have seen how much money you have withdrawn. Avoid taking out money from machines in quiet areas when it is dark.