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Banking basics

June 01 2022

Having a bank account can be pretty handy. Our writer takes a look at a scheme run by HSBC for people experiencing homelessness to open a bank account – and also provides some standard tips on bank accounts. By Liat Fainman

A bank account can provide a safe and secure space for you to store whatever cash you have on hand. You will still be able to access it anytime you wish, but you eliminate the risk of having it stolen or lost while on the streets or in temporary housing. Having a bank account also lays the foundation for financial stability in other aspects of your life. For example, a lot of jobs or benefit schemes will need your bank details in order to transfer your weekly or monthly earnings and renters typically prefer, if not require, direct payments from your bank account. Finally, as you continue to progress towards independence, your bank account will serve as a useful tool to prove your identity and financial history, which can eventually help you borrow money in the future. If those sound like good reasons, then you can use the following information to help you open your first (or next) bank account.

In terms of banks, HSBC has a special service specifically for the homeless called No Fixed Address. This initiative allows people living on the streets or with impermanent homes to open a bank account. In order to to get started, you will first need to get in touch with a local charity specialising in homelessness. There are hundreds of partners across the UK. Examples of Londonbased charities include: Centrepoint, LookAhead, SaferLondon, Crisis, and The Salvation Army. Once you have contacted the charity, you will need to fill out a brief referral form to clarify your situation. Following that, the charity partner will arrange an appointment at your local HSBC to open an account. Finally, after your appointment, HSBC will send your banking information and bank card directly to the charity for you to pick up.

Once you have an account, what are some basics you should know? Let us start off with some helpful vocabulary. There are two different types of accounts you can set up – a current account and a savings account. A current account is where you put money you use every day to pay for necessities like groceries or rent, whereas a savings account is where you store money that you do not need straight away. When you keep money in a savings account, the bank will reward you with small amounts of additional money called interest. For example, if you keep £100 in your savings account for the year, the bank would pay you around 0.05% on top of that, meaning you would end with £105. So, the more money you keep in your savings account, the more money you will earn. On the other hand, if you decide to borrow money from the bank, then you will owe them interest in addition to the original amount you borrowed. Because of this, it is very important that you only borrow money when you absolutely need to and have a plan in place to pay the bank back. Your HSBC branch will be able to give you one-on-one guidance as to borrowing best practices.

The last piece of critical information to know is how to put in and take money out of your account. To do this, you will need two things: your bank card and your PIN number. Your bank card will be delivered to your charity partner as the final step in setting up your bank account. It will be a physical card, called a debit card, with your name on it. Your PIN number is a secret four-digit number combination you will decide on when you have your appointment with HSBC. To store money in your account, you can go to any bank branch or HSBC ATM located in your area, insert your bank card, enter your PIN number, and insert cash in the machine. To take out cash, you will once again find a branch or ATM, insert your card, select the “withdraw” option, and choose the amount you want. You can only take out as much money as you have in your account. For more information, reach out to your charity partner or HSBC. With that, you will be taking your first steps towards better managing your finances.