Managed bank accounts

Managed bank accounts are now offered by a number of companies. The accounts are aimed at people with poor credit ratings and can normally be opened without the need for a credit check.

The account will come with a managed facility which means that when your income is paid into the account, an agreed amount is automatically debited into a separate account for paying your priority living expenses such as rent, mortgage and utility bills.

To find out more continue reading below.

What is a managed bank account?

The managed account gives you a facility which allows you to split your money. You can put aside an agreed amount which is then always available to paying your priority living expenses such as your rent, mortgage, council tax and utilities etc.

Direct debits are set up to deduct money for these payments from this area of your managed account so that you always know that there will be the cash available to pay them.

The rest of your money is then made available to you to withdraw as and when you need it to pay for your other variable monthly expenses such as food, clothing and entertainment.

Advantages of a managed bank account

A managed bank account can be very useful if you are the type of person who has difficulty managing your money throughout the month. With a managed account you always know that sufficient funds are put aside to pay your priority living expenses.

You will not be offered any credit facilities with a managed account and so it will be opened for you without the need for a credit check. It can therefore be opened by people with poor credit ratings.

A managed bank account will normally come with a debit card as standard majking it easier for you to pay for expenses such as shopping and petrol.

Disadvantage of a managed bank account

The main disadvantage of a managed bank account is that you will have to pay a monthly fee to keep the account open. This fee will normally be between £10 and £15 a month.

If you feel confident that without the pressure of your unsecured debts you can manage your money and budget your living expenses payments through the month then you will really not benefit from a managed bank account.

It would be better for you to open a card cash account for free which will normally come with a debit card as standard.