A guide to basic bank accounts
This section tells you:
- what a direct payment is;
- what the advantages of a direct payment are;
- how to open a bank account; and
- how to manage you rent payments.
How will I receive my direct benefit payment?
We aim to make all benefit payments into a bank or building society account. We will do this by using a form of direct payment called 'Bank Automated Crediting System' (BACS). This is a safe and flexible way to receive any payments from us.
What are the advantages?
By paying you using BACS, there is no risk that cheques will be delayed in the post, stolen or tampered with. With BACS, you can withdraw payments on the date that you would normally pay in a cheque. If you pay cheques into a bank or building society, they can take a number of days to clear. If you have a cash card, you can withdraw the cash at any time of day or night from any cashpoint. You can also set up BACS payments yourself from your account using direct debit or a standing order. This means that you can make regular payments, for example, you can pay your rent and make sure that payments are made on time. You won't have to remember to pay or write cheques, wait in queues and you won't fall behind with any payments. You will also avoid penalty charges. It also helps you to build a 'banking history', which may help if you apply for any other banking products in the future.
What happens if I don't have a bank or building society account?
We recommend that you choose a basic bank account. These are offered by many banks and building societies. Please contact us for a free Financial Services Authority (FSA) leaflet.
Can I choose any bank or building society to apply for an account?
Yes, of course. We want you to make up your own mind about which company you want to bank with. The Financial Services Authority (FSA) leaflet gives you independent advice about opening a basic bank account and the main points of these accounts.
If you find it difficult to get the identification you need to open a basic bank account, you can get a letter of identification from one of our enquiry offices. This letter should be acceptable as proof of identity. However, it is down to the individual bank or building society and they may want more items of identification from you. We hope that the letter of identification we give you will help you in this process.
Do you have you any advice for me?
We strongly recommend that if your benefit is being paid direct into your bank or building society account, you arrange with your bank to set up a direct payment for your rent to be paid to your landlord. This will make sure that you don't fall behind with your rent payments.
If you have a change of circumstances and, as a result your Housing Benefit entitlement changes, your benefit claim will be put on hold and you will not receive any payments until the change has been processed. You must tell your bank immediately because you will need to make arrangements to cancel any direct payments which rely on you receiving your benefit. If you do not do this, you may be charged for not having enough money in your account or going overdrawn without permission.
It is possible that the date you receive your benefit and the date your rent is due are different. We also recommend that you check this and make suitable arrangements with your bank and your landlord to make sure that you do not fall behind with any rent payments or receive any penalty charges. You should you arrange to pay your rent at the same time you receive your Benefit payment. For example, you could set up a standing order which will be paid every four weeks, in line with your Housing Benefit payment. We are also recommending that landlords go along with these arrangements as it reduces, as far as possible, the risk of penalty charges and falling behind with, or failing to pay your rent.
Is there anyone that I can talk to about this?
There are trained officers at the following organisations who can advise you on different financial issues that you may come across.
Central Library, Level 4
Dundee DD1 1DB
Tel: (01382) 307494
Money Advice Support Team (MAST)
Brooksbank Community Centre
Tel: (01382) 432452
Suite A, Market Mews
Dundee DD1 3LA
Tel: (01382) 431190
Where can I find out more?
If you want to talk about direct benefit payment, you can visit one of our enquiry offices.
Or, phone us on (01382) 431205.
Or, you can write to:
Director of Corporate Services
PO Box 218