Types of Bank Accounts – A Guide for Sri Lankans in the UK

For Sri Lankans who have moved to live in the UK, one of the first essential steps is to open a bank account. Whether you’re a student or a professional working hard to make a regular money transfer to Sri Lanka to support your family, choosing the right bank account becomes essential to managing your finances and receiving all kinds of payments. The UK offers various bank accounts to meet numerous financial needs. This guide offers Sri Lankan expats an overview of the types of bank accounts available in the UK, their features, and how to choose the right ones for your needs.

Why Opening a Bank Account in the UK is Essential

Opening a bank account in the UK offers several advantages, such as easy access to banking services, the ability to receive payments, and the opportunity to build a financial history. 

Receive Salary Payments

Most UK employers usually require you to have a local bank account. You are often expected to provide your banking details at the time of your onboarding to receive timely payrolls.

Pay Bills Quickly

A UK bank account is essential for managing expenses such as rent, utilities, and daily transactions. Additionally, an account and a bank card are necessary for using online food and grocery delivery services, which can sometimes be a lifesaver for expats.

Send Money Home

A local bank account allows you to use remittance services like ACE Money Transfer to send money to Sri Lanka securely and affordably.

Types of Bank Accounts in the UK

The UK banking system offers various accounts to cater to different financial needs. Below are the most common accounts you’ll encounter as a Sri Lankan expat in the UK.

Current Accounts

A current account is the most common and essential type of bank account in the UK. It is designed for day-to-day financial transactions, such as receiving salary payments, paying bills, and purchasing. Most current accounts have a debit card and offer online and mobile banking.

Key Features

• Instant access to funds via debit card and ATM withdrawals
• Direct debits and standing orders for automatic payments like rent or bills
• Overdraft options (for borrowing small amounts when your account balance is low)
• Mobile and online banking for easy management

Ideal For

• Everyday’s banking needs
• Receiving salary and paying bills
• Sri Lankan students or professionals needing to manage daily expenses

Savings Accounts

A savings account is designed to help you save money while earning interest on your balance. The interest rates, however, vary based on the bank and the type of savings account you choose. These accounts help build some passive income, which, as an expat, would enable you to make some extra money, which you can then send money online to Sri Lanka from UK.

Key Features

• Interest on your savings (interest rates vary by account type and bank)
• Limited access to funds (withdrawals may be restricted to encourage saving)
• Some accounts offer higher interest rates if you lock your savings away for a set period (fixed-term savings)

Ideal For

• Sri Lankan expats who want to build up savings over time
• People who want to earn interest on money they don’t need immediate access to

Basic Bank Accounts

A basic bank account is designed for individuals who may not have a UK credit history or have just arrived in the country. It offers essential banking services without overdraft facilities. This is an excellent option for newcomers to the UK, including Sri Lankan expats, as it allows you to manage your money.

Key Features

• No/low monthly fees
• Basic debit card for ATM withdrawals and payments
• No overdraft facility (so you can’t borrow more than you have)
• Online banking for managing transactions

Ideal For

• New arrivals in the UK who may not qualify for standard current accounts
• People looking for simple, no-frills banking services

Student Accounts

A student bank account is an excellent option for Sri Lankan students moving to the UK for higher education. These accounts are designed for university students and often come with interest-free overdrafts, discounts, and free travel cards. Most banks offer special accounts for international students. 

Key Features

• Interest-free overdrafts (up to a specific limit)
• There are no/low monthly fees, which can come in handy if you need to send money to Sri Lanka from the UK.
• Student-focused benefits like travel discounts or retail offers
• Online and mobile banking for easy management

Ideal For

• Sri Lankan students enrolled in UK universities
• Managing daily expenses while taking advantage of student-friendly perks

Joint Accounts

A joint account allows two or more people to share an account. This is a popular option for couples, families, or flatmates who want to share expenses such as rent, groceries, and utilities. Joint accounts have the same features as current accounts, but all account holders can access them.

Key Features

• Shared access to the account for all parties
• Ability to split and manage shared expenses like rent or bills
• Each account holder can have their own debit card

Ideal For

• Couples or families managing shared finances
• Sri Lankan expats sharing living arrangements who want to manage expenses collectively

How to Choose the Right Bank Account

Choosing the proper bank account depends on your circumstances and financial needs. Here are some factors to consider:

What Are Your Banking Needs?

• If you need an account for day-to-day transactions, a current account will suit your needs.
• If you’re a student, look for a student account with added benefits like interest-free overdrafts and student-specific perks.
• If you’ve just arrived in the UK and don’t have a credit history, consider a basic bank account to get started.
• A savings account with a reasonable interest rate paired with a reliable home remittance service like ACE money transfer might be the best way for you as an expat to send money from the UK to Sri Lanka.

ACE Money Transfer is a more affordable and faster alternative to traditional bank transfers, ensuring your family receives money quickly and safely.

Overdraft and Credit Features

• Some accounts offer overdraft facilities, which allow you to borrow money when your account balance is low. If you plan to use this feature, look for accounts with interest-free overdraft limits.
• For those just starting in the UK, consider whether the bank offers accounts with credit-building opportunities.

Accessibility and Convenience

When selecting a bank account in the UK, it’s crucial to evaluate various features that align with your personal and financial needs. Consider the following factors to make an informed choice:

• Online and Mobile Banking

Make sure the bank offers a user-friendly app for easy access to your account. Banks like Monzo and Starling Bank offer excellent mobile banking experiences.

• Branch Locations

If you prefer in-person banking, choose a bank with convenient branch locations.

• Banking fees

Some accounts come with monthly fees, especially premium accounts. Check the fee structure carefully before selecting a bank account. Look for accounts with no hidden charges and low fees for services like international transfers or overdraft usage.

Top Banks for Sri Lankan Expats in the UK

Here are some of the best banks for Sri Lankan expats in the UK, known for their comprehensive services and ease of use:

1. HSBC
2. Barclays
3. Monzo (Digital Bank)
4. Lloyds Bank

How to Open a Bank Account

Opening a bank account in the UK is straightforward if you have the required documents. Here’s what you’ll need:

Proof of Identity

Your Sri Lankan passport or UK Biometric Residence Permit (BRP)

Proof of UK Address

A utility bill or rental agreement showing your name and address in the UK

Proof of Income or Visa

Some banks may ask for proof of employment, such as a job offer letter or visa status (especially for student or premium accounts). Depending on the bank you choose, you can apply for a bank account online or by visiting a branch.

Bank Smart in the UK: Manage Money and Send Funds Home

Choosing the correct bank account is essential for Sri Lankan expats moving to the UK. Whether you need a basic account to manage daily expenses, a savings account to build your finances, or a student account to access special perks, the UK banking system offers plenty of options.
 

For Sri Lankan expats who frequently send money to Sri Lanka from UK, using services like ACE Money Transfer can save them time and money. ACE Money Transfer offers competitive exchange rates and low fees for secure transfers to Sri Lanka.

FAQs

What type of bank account is best for Sri Lankan expats in the UK?

The best type of bank account depends on your needs. For daily transactions, a current account is ideal. If you're a student, a student account with perks like interest-free overdrafts is a good option. For saving money, a savings account offers interest on your deposits.

Is it possible to open a bank account without proof of address?

Most banks require proof of a UK address, such as a utility bill or rental agreement. However, some digital banks, like Monzo or Starling, may have more lenient requirements and allow you to open an account without a physical UK address.

What documents do I need to open a bank account as a Sri Lankan expat in the UK?

You will typically need proof of identity (Sri Lankan passport or UK Biometric Residence Permit), proof of address (utility bill or rental agreement), and possibly proof of income or visa status for certain account types.

Are there any banks that offer fee-free services for international money transfers to Sri Lanka?

While most banks charge fees for international transfers, using a dedicated remittance service like ACE Money Transfer can be more cost-effective. ACE offers competitive exchange rates and lower fees, making it a better option for sending money to Sri Lanka.

Can I open a bank account online in the UK?

Yes, many UK banks, including digital banks like Monzo and Starling, allow you to open an account online. However, traditional banks like HSBC and Barclays may require you to visit a branch to complete the process.