More people worldwide are getting access to bank accounts. Yet in the UK, there are over a million people who don’t. Often, they have lost faith in banks or have been declined a bank account. There are alternative ways to save and manage your money and we have listed some in this blog.
Alternatives to Traditional Banking
The Bitcoin is a digital currency that can be bought and sold via online exchanges, and used to make peer-to-peer payments around the world. These transfers are usually free, unlike global banking transfers, but it is important to bear in mind that the Bitcoin is still in somewhat of an experimental phase and its value tends to fluctuate.
Credit unions are a big deal in Ireland, the USA and Australia, but have not really taken off in the UK yet – despite their many benefits. In a credit union, people in a shared local community save and borrow money among each other. These not-for-profit financial co-operatives are owned and controlled by their members, meaning there are no outside shareholders involved. And if a credit union makes any profit, these funds tend to stay in the community too. There are over 400 credit unions in the UK and they are regulated by the Financial Services Authority and covered by the Financial Services Compensation Scheme (FSCS), so that the first £85,000 of savings are completely safe.
Safes or Safe Deposit Boxes
This is the ancient and somewhat more literal way of ‘saving money’ and only one step ahead of keeping your money under your mattress or tucked away in an old sock. Although you have full control over your money, you also expose it to increased security risks.
By turning your money into assets you can protect yourself against inflation – something you would never be able to do by simply keeping your money in a safe. Other hard assets include fine art, jewellery, cars and just about anything that you think might go up in value over time.
E- Accounts / Digital Current Accounts
Most e-accounts / digital current accounts have a Mastercard® debit card or Mastercard and they are accepted anywhere a ‘normal’ bank card would be accepted. The difference is that they do not advance you money, but you have to top them up before you can spend. To some people, this can offer some peace of mind that they will not spend more money than they actually have.
Alternative Banking Overview
This list offers examples of how you could get around traditional banking and although many of these might not be right for you, it can be worth remembering that alternative banking facilities can provide vital services to those who have made the decision to quit using high street banks, or those who have been rejected when trying to open a new account.
Another way of getting many of the benefits of traditional banking, without having an actual bank account, is a Mastercard® card membership scheme like Suits Me. The card you’ll be offered can be used in all the usual places and you get online banking facilities too.