Best Bank in the UK in 2021

Financial institutions, commonly referred to as banks, serve multiple purposes for both citizens and the nation. From safeguarding your money to utilising them, from providing interest to giving loans, a bank plays a vital role in the growth of your country’s economy. A bank collects your money as deposits with a certain percentage of interest and lends them to other customers as loans. The interest rate varies between the deposits and loans, which also works as the profit margin for banks. A few primary activities of banks –

• Safeguarding the customer’s money and assets:

  Keeping all your cash and valuable items such as gold, bonds, essential papers, etc., at home could be risky. Not only is it dangerous but also worrying and bothersome. Keeping records of their expenses and place could literally mess your head. Not to mention the never leaving fear of getting robbed. Keeping your things in the bank can erase your worries to a certain length. It keeps your money and assets safe. Bank provides you with clear and accurate records of your account balance. It offers security by tracking your account activities such as transaction alert, log-in alert, verifying your account activities via official messages or calls, etc.

• Offering interest on money deposits:

  Bank offers you an annual interest rate in exchange for the money you chose to deposit. The interest rate varies in number based on the type of service you choose. In a few banks, the interest rate is fixed chiefly and will not be affected by any means unless the agreement is nullified or broken. The deciding factor of the interest rate is the duration, chosen service and the amount of your money deposit. 

• Lending money to individuals or organisations:

  Banks provide loans to individuals and organisations for various purposes. Where do they get that money? Simple, the money they receive from you as deposits. Banks utilise your deposited money as investment by lending them to people or companies under various terms and conditions. The lent or loaned money later returns with a specific rate of interest which is counted as profits for the bank.  

• Offering financial advice and services such as insurance:

  Insurance is yet another profit source of the bank. Almost all the leading banks in the UK offer insurance and financial services such as investment opportunities, saving plans etc., along with account services. Bank employees get commissions or extra benefits for insurance deals while the bank gets to collect more money.

Besides the above mentioned basic activities of the bank, there are many more activities of a bank such as bill payments, LC, financial backer, inter-bank activities etc.

Pros And Cons of Using a Bank:

Advantages of using a bank

There are many benefits of using a bank. It saves money, time and makes things so much easier – be it for a student, worker or housewife.

• Source of income:

  Bank offers you an annual rate of interest over your deposited money. The money from the interest could be your source of income which you can use for whatever you want.

• Savings:

    Keeping your money in a bank can work as savings. Often we speed our extra money on unnecessary stuff which could have been avoided if they weren’t in our hands. Besides, banks have saving services. If you register for those services, it will restrict your money, and you won’t be able to swipe your card as you please. 

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  Easy transaction:

  Through the mobile banking service, you can now make fast transactions easily. You can pay your rent, shopping bills or even electric bills. You won’t have to visit a bank branch or store and stand in the long queue for making these transactions anymore. Just do it with your mobile app in a few minutes.

• Having a clear record:

  Bank keeps an accurate track of your bank account activity. It includes all the transactions, withdrawals, deposits, sources of transactions and deposits, bill details, payment history etc. You can quickly check where you spent your last month’s salary or if you forgot to pay this month’s rent or bills. 

Disadvantages of using a bank

Like every other thing, there are also negative points of using bank services such as

• Operating charges:

  Bank charges you for every service you use or apply for. From money withdrawal to annual card fee and mobile banking, you must pay a lot of extra charges for subscribing to their services, even if you don’t use them. 

• Insecurities:

  Just as mobile banking could make things easy and fast for you, it could also bring you trouble. There is a high possibility of getting your bank account hacked through your phone. Also, if you get second thoughts about a purchase or write an extra zero for the payment, you won’t be able to do anything. So, always be super sure of your transactions.

• Credit increase:

  If you use credit card services, it’s easy for you to lend yourself in debt. Even though credit cards allow you instant loans but the interest rate is too high. So, it works as a disadvantage even if it seems like an advantage in the beginning.

• Balance requirement:

  Some bank accounts require you to have a certain amount of money in your bank account. You won’t be able to withdraw them no matter what. The amount can vary in the type of account you use. Some require a decent amount whilst some high, like for premium or VIP services etc.

Top banks in the UK

If you are looking for good banks in the UK, these banks could be the right choice. The UK has a vast range of banks across the nation. Here are the top 5 banks by assets and market in the UK you might consider for your future banking needs:

• HSBC: 

  Hong Kong and Shanghai Banking Corporation, known as HSBC Holdings plc, is one of the largest banks in the UK and one of the top five largest banks in Europe. It originated back in 1865 with offices in Hong Kong, Shanghai, and London. As of now, HSBC UK Bank plc has 594 branches throughout England and Wales with the highest number and in Scotland and Northern Ireland with a much smaller presence. HSBC offers account services such as savings, current and international accounts, loans, mortgage, insurance, investment advice and plans, financial health and support services, etc.
  

• Barclays:
  

  Barclays plc is a British multinational universal bank and known to be also one of the largest banks in the UK. It is headquartered in London, England. Barclays got two divisions, Barclays UK and Barclays International. Barclays International is supported by Barclays Execution Services, which is a service company. Barclays also offers current and saving account services, loans, overdraft, Cash ISAs, bonds, investment resources, mortgage, insurance services, etc.

• Lloyds Banking Group:
  After the acquisition of HBOS, a banking and insurance subsidiary company of the Lloyds Banking Group, the Lloyds Banking Group plc was formed by Lloyds TSB in 2009. With 30 million+ customers, Lloyds Banking Group is one of the UK’s largest British financial institutions. They have served Britain through their products and services for more than 320 years. The bank provides account service, loan service, mortgage, ISAs, insurance, travel services etc.
  

• NatWest Group:
  

  National Westminster Bank or NatWest is a retail and commercial bank established in 1968 by the merger of National Provincial Bank and Westminster Bank. It is Headquartered in Lonon, UK. In 2020, the bank was re-named NatWest Group after becoming part of The Royal Bank of Scotland Group. The bank also provides services such as accounts, mortgages, loans, home-banking, security etc. 

• Standard Chartered:
  

  Standard Chartered is a British multinational banking and financial service company. It has 1,200 branches across 70 countries, including Europe, America, Asia, Africa and the Middle East. With a 160 year history in the UK, the company is headquartered in London, England. The bank offers corporate and institutional banking, transaction banking, financial markets, corporate finance, private banking etc. 

Top banks in the UK by customer satisfaction

According to the customer satisfaction survey done by Finder.com, one of the UK’s fastest-growing comparison sites, below are the top five banks in the UK as per the customer choice. 

• Monzo

  

Monzo has topped the survey with 89% of people willing to recommend the bank to their friends and family. Monzo is a digital bank that operates digitally without having any actual branches or outlets. The bank offers current account services and integrated savings account services as well as personal loans. It’s a complete app-based bank, and the customers are more than satisfied with its overall features.

A few basic features of Monzo:

• Salary sorter. 
• Spending budgets.
• Bills pots.
• Instant spending notifications
• Free cash withdrawals abroad
• No transaction fees.
• Energy switching.

• Nationwide 

Nationwide stands second with 83% of recommendation ratings and great reviews. It got a widespread network of branches and 24/7 customer service, and many more beneficial perks for their current account holders. 

A few basic Nationwide services:

• Variety of current account service 
• Switching incentive benefits
• Offering interest rate on balance
• Global acceptance
• A massive number of bank outlets
• Mobile banking

• Metro Bank 

Metro Bank is a retail and commercial bank, scoring the third position in the survey list with an 81% recommendation rate. It also has several bank branches and online services. The best selling feature of the bank is that it offers free transactions in Europe and zero monthly fees. 

Besides, few more viral features of Metro Bank are:

• Mobile banking
• Global acceptance 
• Round the clock assistance

• NatWest 

NatWest is one of the largest banks in the UK due to its assets and many customers and employees. It has both in-branch and digital banking services. It got 80% of people willing to recommend the bank and great reviews of customers enjoying their features and services.

Namely popular features of NatWest:

• Different options of current account service 
• Global acceptance 
• Round the clock assistance
• Cashback on bill payments 
• Travel insurance 

• Santander 

Santander is one of the leading personal financial services companies in the UK, headquartered in London, England, UK. Sharing the same high street peer of 80% recommendation rate with NatWest, Santander is also one of the largest mortgage providers in the United Kingdom. 

Best-selling points of Santander:

• Cashback for a range of major retailers
• No monthly fee to maintain the account
• Overdraft facilities 
• A wide range of related products
• the interest rate on the current bank account balance

Bank And The Economy

Banks can affect the economic development of your country tremendously. A bank is a financial institution. It works with the finance of the general public. How the bank systems can influence the economy are:

• Facilitating commerce:
  

  One of the basic reasons behind needing a loan is to start a business, be it small or big firms. Business demands enormous capital, and banks are the safest source of collecting finance. You can arrange your business capital from the bank by taking loans. By providing you loans, the banks are helping the country create employment and commerce opportunities. And that’s how banks affect the economy as they facilitate commerce for the country.

• Working as a guarantee:

  To complete a trade successfully, both nationally and internationally, you will need a middle party. All the transactions can’t be made in cash or in person, and the bank comes further during such a situation. It acts as a guarantee for international trade during a middle party for national exchange. You can also issue LC from banks which can make the trade execute flawlessly, and flawless execution of trade undoubtedly can boost economic development.

• Easy foreign transaction:

  You can easily make foreign transactions through banks. It could be a business transaction or your shopping transaction. Foreign exchange can open international trading doors and increase foreign investments in your country. Thus, bringing positive changes in the economy and aid economic development.