Spotahome has opened in a new city – London! If you want to live there, you must do a couple of things: book accommodation with us and find the best bank for your hard earned cash. After all, you don’t want to run out of money and turn into Oliver Twist, promising to do anything for bottles of beer on a weekend, a Playstation, and food, glorious food. Finding the right bank doesn’t have to be a hassle, and you can have peace of mind after setting yourself up with an account. Then you can spend the money on something really useful, like a selfie stick.
Best London Bank for Expats: Criteria
For this study, I’ve looked at some key criteria:
- The monthly fees associated with bank account.
- How much interest the account pays, if any.
- The overdraft facility.
- What expats have said about the bank.
I have looked at banks that make it easy for expats to open an account, with services that are not tied up in red tape. However, you will still need all the important documents that prove your identity, such as a passport and proof of address. If you have recently moved over to the UK, then a proof of address may be hard to obtain. Discuss with somebody you trust about using their address, or you can use the **tax code **from your new employer as this, along with the passport, is sufficient proof of who you are and your status in the country.
Another issue could be your credit score. As an expat, you will not have a UK credit rating and this may delay or obstruct getting a bank account. Most banks today, however, are aware of this and have taken steps to recognize your credit history in your country of origin.
Best London Bank for Expats: The Contenders
Tesco – Every Little Helps. That every little part of their slogan is getting larger as they are expanding their operations. Their commercial and banking arms are linked and, if you open a current account with them, you will have access to a credit card that earns you points on your Tesco club card. This is similar to the initiative offered by Barclays, and it really depends on whether ancillary benefits are enough to tempt you to join Tesco. A major plus point is that the current account does not carry any monthly fee, which can save you a little bit more money each month, and you have free withdrawals from ATMs. There is a 1 pence charge for withdrawals made outside of the UK. Furthermore, you can negotiate an overdraft with the bank, though you will have to pay a flat fee for the privilege, and this facility covers planned and unplanned overdrafts. Tesco have a policy whereby you have until 5 pm on the day your overdraw your account to get it back into the black, which is quite beneficial because you won’t have to pay interest on it if you pay it back on time. You can access your account 24 hours a day by logging in online, downloading the mobile app, or contacting the call centre, and free SMS alerts act as a useful security feature that can be sent you to you any minute of any day. The mobile facilities are cutting edge, with contactless payments and bank transfer possible through the banking app. Finally, interest rates are quite competitive and Tesco is one of the Top 5 banks in the UK when it comes to offering generous interest rates.
Tesco – they provide shopping, insurance, and banking. Tesco is Skynet.
Cons: Customer service, as in most banks, is considered hit and miss; it’s a lottery who you will speak to if choose to do business over the phone. One thing you should avoid are the insurance policies offered by Tesco, reviews for this service are terrible across the board. If you have a car, for example, that needs coverage, look elsewhere.
HSBC is a great option for expats as it is has offices throughout Europe. If you are already with the bank in your country of origin, then it is possible to open an account in your new city before you arrive, as long as you give the bank 30 days notice. This option is also available for people who are opening a bank account with HSBC for the very first time. They operate a student friendly student account that guarantees you an interest free overdraft of £500, something that Erasmus students can really take advantage of as university education in London is quite expensive. For those with wanderlust, HSBC is an attractive bank because you can order foreign currency commission free, with Euros and Dollars already in the bank and other currencies delivered the next day. Like other financial institutions, contactless cards are becoming the norm, as is telephone and internet banking.
Cons: A charge is applied for withdrawals from ATMs outside the UK, varying from £1.75-£5, and while it’s a standard charge, other banks offer cheaper rates. In addition, while you can download an app or log in online to manage you bank account, does it work? According to HSBC customers, the mobile app and the online platform are unresponsive, sluggish, and seriously inefficient. It can take an age to log in and transfers can be held up, and, if they are, you’ll end up paying more interest on the transaction. Finally, their customer support chat on their website is flawed, and it will not answer your queries properly.
Lloyds of London are an institution in the city, much like Dick Van Dyke’s English accent, Paddington Bear, and A Clockwork Orange. What is more, their useful how-to-guide for expats is a clear and concise run through of how to open a bank account in London if you are all foreign and that. You will, in most cases, only need a passport to prove your identity and, if you are a student, a letter from your university. Once you are set up with a basic current account, you have a daily withdrawal limit of £500, no monthly fees if your balance is in credit, and internet and mobile banking. A wonderful feature is the money manager facility, an online track of how you are spending your money that is ideal for those on a budget in their new city. This can be supplemented by receiving SMS alerts when your balance is low. Another unique benefit is that you can make extra savings by registering with Save the Change, a facility that rounds up the change on an item to the nearest pound when it is purchased with a Lloyds debit card. The difference is then sent to your savings account. You can also get 15% cashback in places where you regularly shop, and this can be discussed in detail with the bank if you wish to take advantage of it.
Cons: You can earn a whopping 1% interest on your current account! 1%! Likewise, the interest free overdraft limit is very small when compared to other banks. The last negative to consider is that of customer service. A newspaper poll showed Lloyds ranked 9th out of 14 banks in an assessment of how satisfied customers were with customer service. It’s a fair-to-middling result, so your experiences with their customer service will be a matter of luck.
First direct is a bank with a great reputation, which is why it is, er, first in our list of banks. It is a self-styled unexpected bank, seeing themselves as unique in the services they offer. Unlike HSBC, they have human operators manning stations 24 hours a day, seven days a week, 365 days a year, answering queries online, via tablets, and through the phone; all of which are mediums through which you can do your banking once you are set up. They claim that ‘robots can’t help you’, so bye bye automated machines and hello making First Direct staff work on major holidays and round the clock to provide support for you. It must be working, though, as they have won 15 major prizes for their banking services. You can receive SMS alerts when your pay cheque comes in, or when you balance reaches a certain level. Through Paym, you can transfer money to contacts safely and securely, meaning that you can help fellow expats if they are struggling to get by in London, or they can help you! A generous interest free overdraft of £250 is on offer if you need more financial assistance. And speaking of money, to further inveigle you to join, you are given £100 if you open a current account, and another £100 if you are not satisfied with it!
Cons: Telephone banking is not provided, unlike with other banks, though whether this is a major issue is negligible as it is a service that you can probably live without. First Direct do not pay interest on current accounts, while there is a £10 monthly account fee that is only waived in the first 6 months of the account opening, or if you maintain a balance of at least £1000 each month.
Best London Bank for Expats: Peace of Mind
Tired of sleeping with one eye open and a baseball bat while you safeguard the money that’s hidden in a sock underneath your mattress? I know I am.
That’s why banks are great, and you can really trust them (I mean, if you ignore their role in the collapse of the global economy, ahem) Getting a reliable bank is an important step in feeling at home in your new city. It’s important to make the right choices, and you can do so by looking at these comparisons of the best banks for customer satisfaction, the best bank accounts for when you are in credit, and the best banks for authorized overdrafts. Inform yourself and see what’s best for you. If it doesn’t work out, you can change bank. Or find a baseball bat.
With the money you save, you can
waste invest your money on colour changing shower heads, an underground parking dock, a coffee table aquarium, or a magic wand TV remote. And… you can have peace of mind.
You need a house in London? Spotahome can help!
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