What is a jam-jar bank account?

A bank account is just about a necessity in modern life. It's useful for paying for goods and services, both in-store and online, managing your money, paying bills and keeping your money safe. Many employers only pay wages electronically too, so people without a bank account may often be at a disadvantage.

Why don't some people have a bank account?

There are several reasons why somebody would go without a bank account, such as:

• They can't get a normal current account: for example, if they have poor credit history.
• They don't want a bank account because they don't want to incur unauthorised overdraft fees and other charges.
• They may just prefer to manage their money in cash.

What are the alternatives to a normal 'current' account?

People who don't like the idea of, or cannot get, a current account may benefit from an alternative, such as:

A basic bank account

Basic bank accounts have most of the features of a current account, such as a card to withdraw cash, and Direct Debits. They are also open to people with bad credit because they often do not carry out credit checks. Some people prefer these kinds of accounts because they do not provide overdraft facilities, so they can't accidentally spend too much and get into debt.

If you'd like to find out more about basic bank accounts, click here.

A 'jam-jar' bank account

The most important feature of a jam-jar bank account is the money-managing feature. The account is usually divided into 'pots' or 'jars' containing money. For example, one pot could be for 'spending', one for 'bills' and perhaps another for 'savings'. You decide how much money goes into each by working out how much you need for your bills and how much is left over.

The advantage of a jam-jar account is that you no longer have to think so much about managing your money. You will have the reassurance that, come 'bill-day', you will not have accidentally spent the money you need without even realising it.

It could be well worth paying a monthly fee for the service if you feel you could do with some help managing your money like this.

The thinkbanking account provides a money-managing service and puts customers' income into two accounts: one for essential bills and one for spending money. It's open to everyone - even people with bad credit, as long as they can show they're 18 or over and a UK resident.

Click here for more information, and to find out if the thinkbanking account could be right for you.

Tags: bank, banking, banking account, credit history, managing money

Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider. Cards are provided by third parties and are subject to eligibility, status and terms and conditions. Applicants must be UK residents aged 18 or over.