thinkmoney Personal Account: bank account that ensures you'll pay all your bills

The new thinkmoney bank account is aimed at people who have had difficulties opening accounts in the past. Not only does it not include a credit check, but it also ensures you pay all of your bills!

The thinkmoney bank account is open to everyone with no credit check.

It's aimed at people with difficulties opening a bank account, and people who want help to budget properly. The account is also for individuals and couples who want one simple, transparent fee for its banking services, rather than the standard hotchpotch of charges and hidden costs.

Finally, thinkmoney guarantees you'll always receive “the best possible service”.

thinkmoney now has more than 4,000 reviews. Customers frequently write that the service is very friendly and they find it much easier to budget, to avoid missing bill payments, and even to save money by avoiding penalty charges.

I'll explain what makes thinkmoney's banking service special after telling you the costs. I'll finish by comparing the account to your alternatives.

How much does it cost?

The account costs £14.50 per month, or £21.25 for joint accounts. That's £174 or £255 per year. There are no charges for late payments, rejected payments, missed direct debits and, since you can't go into the minus, there are no charges for going overdrawn.

If thinkmoney has to reject a regular payment more than once due to lack of funds, it might withdraw the facility for direct debits and standing orders. However, you're a lot less likely to miss payments with thinkmoney, as you'll learn later.

There are a very small number of other charges, including for losing your card, making purchases or withdrawals overseas and overseas bank transfers.

You currently receive no credit interest with thinkmoney.

What you get for your monthly fee

You get all the services you expect in a modern bank except an overdraft, including online and telephone banking, text updates, transfers, direct debits and standing orders. You can have your salary, benefits and other income paid into the account.

You get a MasterCard debit card for cash withdrawals and purchases. You receive no cheque book, but you can pay cash or cheques in through Royal Bank of Scotland or NatWest branches, or by post.

Much better for budgeting than a normal account

In addition to those normal banking services, the thinkmoney account helps you budget, which is one of the main reasons for the rave reviews the service is getting from customers.

Firstly, it splits your money into two accounts. It holds back money in a bills account to cover all the bills that you pay by direct debit or standing order: rent, Council Tax, utilities, pay TV, insurance, regular savings and so on. You can notify thinkmoney of changes either by SMS, by phone, or online.

Any money left over is transferred to your card account so that you can spend it with your thinkmoney MasterCard debit card.

You receive an SMS whenever money is paid into the account. This tells you how much you received and from whom. Many thinkmoney customers receive benefits or other payments that arrive more than once a month, so the SMS makes income easier to track.

The same SMS also tells you how much thinkmoney is being held back to pay your regular bills, and how much is available to spend on the card for fun money and for non-automated bills such as food.

The online banking makes it easy for you to see whether, at your current rate of spending, you're going to balance your books over the next month or so.

Your money isn't restricted in an emergency

Since spending money is strictly controlled, Ian Williams from thinkmoney says that customers tend to budget carefully and typically say “I know where I am at with my money.”

thinkmoney did some research to see if customers wanted easier access to their bill money, but the overwhelming response was against, because customers like that the service forces them to live within their means.

However, if an unexpected cost does come up, thinkmoney can immediately release funds held for bills so that it can be spent on your card.

More help with budgeting

Included with the cost of the fee, you can speak to money managers at any time if you need any kind of tips or help with budgeting. Reviewers also appear to appreciate this.

In the event of an emergency, for example, the money managers might see that no harm will be done if money is moved from the bill account to your card account if it can see that more income is going to come in soon. Or, in a worst-case scenario, the manager might recommend which bill it would be best for you to skip.

You're banking with Royal Bank of Scotland

From the customer's point of view, the thinkmoney account is like any other current account with a few additional extras, except that, under the surface, it's not really a current account. In reality, the money that goes into your thinkmoney account is held in a client account at Royal Bank of Scotland.

Hence, you're covered by the Financial Services Compensation Scheme as normal if the Royal Bank of Scotland can't pay you your money.

You can complain to the free Financial Ombudsman Service if you have a complaint about thinkmoney that you can't resolve. It could force thinkmoney to compensate you. Read How to complain to the Financial Ombudsman Service for more.

Reward scheme

thinkmoney has a rewards scheme for its customers who spend at specified retailers online through its rewards portal. I have not got any details on it, but I always warn people to shop around to see if you can get the same benefit (whether it's a cut-price day out or a book) more cheaply.

How thinkmoney compares

thinkmoney has a few competitors in its target market, including Royal Bank of Scotland, Co-op Bank, Nationwide, Lloyds and Bank of Scotland, which have basic bank accounts that might help you.

There are also a growing number of prepaid cards that let you pay your wages on to them and even pay direct debits and standing orders. These are often available to everyone with no credit checks.

Barclays Bank's basic-bank account, called the Cash Card Account, is now the only bank to offer an account to undischarged bankrupts.

It charges no monthly fees and forces you to budget yourself since you're not allowed an overdraft. You can do direct debits and standing orders, and you can bank in branch, online or over the phone. You can choose between a debit card or a cash card (which is for ATM use only). You don't get a cheque book.

You can choose to receive a variety of free SMS alerts, e.g. about large payments in or out, an alert when your balance reaches a limit you set, or a weekly balance including the last five transactions.

Although there are no bounced cheque or overdraft charges, the bank charges £8 on each day that it stops one or more direct debit or standing order payments, due to lack of funds. Sometimes a company will try to process the same direct debit repeatedly until it goes through. Get 22 such charges in one year and you'll have paid more than the cost of an individual thinkmoney account, and it'll be harder to budget following a month where you've been hit by lots of these penalties.

Barclays might cancel one or more direct debits or standing orders if you don't ensure there's enough money in the account when they're due to be paid.

Clearly, anyone who can budget well already shouldn't pay £14.50 a month just for budgeting help, and people who need an overdraft can't get one through thinkmoney. You can more appropriate accounts here and should consider a free budgeting tool like Lovemoney's MoneyTrack.

More on bank accounts:

Clear your overdraft in three weeks

The best joint bank accounts

Why everyone is switching their current account to Nationwide

Get paid £100 to switch banks

Five places where you can get an overdraft for free