Can You Have More Than One Current Account in the UK?

Current accounts in the United Kingdom serve as a foundational tool for managing daily finances. These accounts enable individuals to receive income, pay bills, and conduct everyday transactions. They provide access to funds through debit cards, direct debits, standing orders, and online banking services. Maintaining a current account is a standard practice for most residents to handle their financial inflows and outflows efficiently.

The Possibility of Multiple Current Accounts

Individuals in the UK are not restricted to holding a single current account. It is legally permissible and a common practice to have multiple current accounts, even with the same financial institution. This flexibility allows people to tailor their banking arrangements to their specific financial needs. There is no set limit on the number of current accounts an individual can open, provided they meet each bank’s eligibility criteria.

Reasons for Holding Multiple Accounts

Many individuals choose to maintain more than one current account for practical financial management. One common reason involves improved budgeting and financial separation, where different accounts are designated for specific purposes, such as one for bills and another for discretionary spending. This approach can simplify tracking expenses and help ensure funds are allocated appropriately.

Another motivation for opening additional accounts is to explore and leverage different bank features or incentives. Banks often offer diverse perks, including cash bonuses, higher interest rates on balances, or specific rewards programs like cashback. By diversifying accounts, individuals can benefit from unique offerings across different providers, such as better mobile app functionality or advantageous terms for international transactions.

Individuals might also hold multiple accounts to manage varied income streams or for contingency planning. Separating personal income from earnings derived from a side business or rental properties can streamline accounting and tax preparation. Furthermore, a secondary account provides a useful backup, ensuring access to funds if there are issues with a primary account, such as a lost debit card or a temporary system outage. Joint accounts also allow an individual to have a personal account alongside one shared for household expenses.

Key Considerations for Managing Multiple Accounts

Managing multiple current accounts requires careful attention to several administrative and financial aspects. One consideration involves the impact on one’s credit score. When applying for new current accounts, banks typically perform a credit check.

While opening a basic current account often involves a “soft” credit check that does not affect a credit score, applying for accounts with overdraft facilities usually triggers a “hard” credit check. Multiple hard checks within a short timeframe can temporarily lower a credit score, as it might signal increased financial risk. However, responsible management of multiple accounts, including timely payments, can contribute positively to a credit history over time.

Another important factor is the Financial Services Compensation Scheme (FSCS) protection. The FSCS protects eligible deposits up to £85,000 per person, per authorised institution, not per individual account. If a person holds multiple accounts with banks that share the same banking license, the £85,000 limit applies to the combined total across all those accounts. For joint accounts, the protection is doubled, covering up to £170,000. Individuals with deposits exceeding £85,000 across multiple accounts should ensure their funds are spread across different, separately authorised institutions to maintain full FSCS protection.

Maintaining several accounts also introduces an increased administrative burden. It necessitates remembering multiple login details, tracking balances, and monitoring statements for each account. Without diligent organization, this can lead to overlooked fees, missed payments, or difficulty in maintaining an accurate overall financial picture. Robust security practices are also important across all accounts, including using strong, unique passwords and multi-factor authentication, to protect against potential fraud or cyber threats.

Opening Additional Current Accounts

The process for opening additional current accounts in the UK is generally straightforward. Applicants typically need to meet basic eligibility criteria, such as being aged 18 or over and a UK resident. Some accounts may also require a minimum monthly deposit or a certain salary level.

Applicants are required to provide documentation for identity verification and proof of address. Accepted forms of identification include a valid passport or a UK photocard driving license. For proof of address, documents such as a recent utility bill, council tax bill, or bank statement are usually accepted. It is important that the proof of address document differs from the one used for identity verification.

Applications can typically be completed through various methods, including online platforms, mobile banking apps, or in person at a bank branch. While the process is designed to be efficient, some banks may conduct a credit check, particularly if an overdraft facility is requested.