- Easy to open online
- Debit and credit cards
- Owned by HSBC
- Est in 1989
- Current and savings accounts
- Loans, mortgages, investments
first direct has been around since the late 80s and has brought innovation into the stale banking sector. Today, the bank has one and a half million customers that rely on its many services.
We’re comparing first direct to other modern digital banks and discuss its many financial products. But first, here’s a short verdict:
first direct is still a very robust online bank that provides an all-in-one banking platform. Lately, the app, new Mastercard, and subsequently the customer service have run into problems which has reflected in customer reviews. We’re sure that the bank will quickly resolve these issues and amend the relationship with its many users.
About first direct
first direct is an internet and telephone-based retail bank with headquarters in Leeds, United Kingdom.
Today, the first direct bank is famous for its comprehensive and well-established take on online and digital. first direct is an HSBC Bank plc division and therefore falls under HSBC’s FSCS guarantee, allowing eligible depositors to claim up to the FSCS’s limit where necessary.
Why is first direct so special?
first direct has a long history of innovation in the financial services beginning in 1989, launching the first online banking service in 2000. In 2006, first direct also launched a mobile phone banking service, before the invention of the modern first direct app.
Pros and cons
- Easy to open an account
- Loans and credit cards
- Savings accounts
- Use Siri to make payments
- Few extra features
- No budgeting tools
- Low savings interest rates
- Issues with new Mastercards
Unlike most digital banking apps, first direct does not offer budgeting tools to help its customers manage their finances. However, the bank has announced plans to launch a separate budgeting app called “Artha” that will bring all of the customer’s bank accounts into one place, provide overviews, insights into spending patterns, etc.
How to open an account with first direct?
To use the first direct app, it’s, of course, necessary to register as a first direct customer. You can do this relatively easy and fast with an easy in-app signup process.
Download the first direct app, and enter a few personal details and verify your identity. The entire process can take anywhere from minutes to a day, depending on how long first direct takes to verify your identity.
However, the easiest way to open new bank accounts with first direct is via a web browser. Go to their website and select the option to apply for a new account or a first direct joint account. They also make it easy to switch over your existing bank account to a first direct one with the Current Account Switch Service. They’ll move everything over for you in just 7 working days and any potential mistakes will cost them, and not you.
It used to be the case that a first direct account would cost you £10 per month after getting your first six months for free. However, this charge only applied to customers paying under £1,000 into their account each month or not utilizing their first direct savings, credit, loan, mortgage, or home insurance services.
Although £10 per month doesn’t sound like much, in 2019, first direct decided to scrap their monthly fee, making all of their services even more accessible and competitive with newer digital bank accounts.
How to add funds to the first direct account?
There are many options for depositing funds to your first direct accounts. You can use mobile or online banking to set up a direct deposit or a quick transfer into your first direct account.
There’s also their famous award-winning phone banking service that allows you to speak to real people on the phone in the UK to help you move your money around and manage your finances.
first direct’s relationship with HSBC means that, unlike other digital banks, first direct accepts cash deposits that can be paid in at physical bank branches. It’s also possible to withdraw over the counter at an HSBC branch. They also offer a cash deposit service at the Post Office, although this will cost a £1 fee per deposit.
first direct savings account
first direct offers a no-limits, no-restrictions savings account that has no minimum deposit. The first direct savings account will mainly appeal to customers looking for somewhere to stash part of their money securely.
The account allows you to make instant transfers to another first direct account, and it can also be managed over the phone and through the app. It also offers first direct joint savings accounts with the same features.
Customers also have the option to make automatic transfers from their primary account into their savings.
There’s a range of savings accounts available:
- Regular Saver Account 1.00% AER
- Cash ISA 0.10% AER
- Bonus Savings Account 0.01% – 0.05% AER
- Fixed Rate savings 0.15% AER
- Savings account 0.01% AER
The first direct app
The first direct app is the gateway to all of their services. And, although you can use all of their services over the phone (by calling them), it’s more convenient to do it through the app as telephone wait times can be quite long.
Once downloaded and log in to the app, you can choose to link it up with any first direct account – current account, savings account, credit, etc. The app will show you your balance and transactions, allowing you to look at each of your payments.
The app then offers a list of other features that can be used for general everyday banking, which is helpful when you can access such a broad range of actions on a mobile app.
The first direct app makes payments straightforward and simple to set up. You can view and delete all of your direct debits in the app and set up new payments and transfers.
Furthermore, you can amend your existing standing orders, set up new ones, and seamlessly move money around your first direct accounts. The app also utilizes Paym, a service that allows customers to make easy and fast payments to a mobile number.
Recent and pending transactions are updated quickly in the app, which is excellent for staying on top of personal finances. In addition to these services, you can also apply for further first direct accounts in the app, so you don’t need to switch to a web browser to make your application.
first direct loans
first direct offers both personal loans and credit cards. You can get personal loans from between £1,000 and £50,000 with a repayment period between 1 and 7 years.
The website offers a loan calculator that allows you to work out repayments on a potential loan. Loan application takes place in the app, over the phone, or on their website and will depend on your credit score.
The representative interest rate is 3.3% APR for loans between £7,000 and £30,000 over 60 monthly repayments of £126.68. The total repayable amount is £7,601.09.
Besides loans, first direct also offers credit cards with no annual fee for those looking to make balance transfers that come with a representative 18.9% APR and 0% interest on balance transfers for the first 27 months and a 2.29% balance transfer fee for the first three months.
Then there are Gold Cards – credit cards for purchases. Gold Cards have a 16.9% APR and 0% interest on purchases for the first 17 months.
Both of these credit cards are subject to credit status checks and can be applied for online, over the phone, or in the app.
first direct offers you investing in a range of UK listed Exchange Traded Funds (ETFs), but also in most UK and Irish equities listed on the London Stock Exchange and lastly, in UK government securities (gilts).
To start investing in stocks, you need to register for a sharedealing account which doesn’t take much time but the authorisation process might take from 7 to 10 days.
After you’ve successfully registered, log into your online banking account and then go to your Sharedealing account. You can choose to buy or sell a stock by choosing it and entering quantity.
There’s a quarterly account fee of £10.50. The first nine trades each quarter are also done for £10.50 and then £7.95 after the ninth. The good thing is that you can try out the service with a virtual portfolio to dip your fingers.
Transactions in Euro will cost €30 and bond trading will set you back £40. These are prices for online trades. Telephone trades are more expensive.
first direct offers two types of mortgages:
- Repayment mortgages
- Interest only offset mortgages
They also offer three types of repayment rates:
- Fixed Rate Mortgages
- Tracker Rate Mortgages
- Standard Variable Rate Mortgages
To apply for a mortgage, you and any joint applicants have to be UK residents and taxpayers and be able to provide evidence of income and expenses so that first direct can decide if you can afford the mortgage.
You can apply by phone on 0800 48 24 48 for new customers and 03 456 100 103 for existing account holders. You can also apply online which is simple and convenient but comes without advice from a mortgage advisor that you get when applying over the phone.
You also won’t receive the same protection granted by the Financial Conduct Authority’s rules as clients who use the advised telephone service.
If you aren’t 100% sure about mortgages, your best bet would be to use the telephone service.
There are several types of insurances offered by first direct. You can choose from:
- Life insurance
- Home insurance
- Travel insurance
At the time of writing this review, first direct weren’t offering life insurance policies to new customers for an undisclosed reason.
With home insurance, you can insure unlimited buildings for fire, water, storm, and other emergencies. You can also insure contents for up to £50,000 which can be increased.
Of course, the best option would be to get combined buildings and contents insurance which can be more cost-effective.
When it comes to travel, first direct doesn’t woo us because it has fees that are rather unusual for digital banks. In this regard, first direct is more similar to high street banks.
All foreign transactions come with a fee of 2.75% (debit cards) and 2.99% (credit and Gold cards) of the transaction value. These fees are taken out of your account within one day of the transaction. Similarly, ATM cash withdrawals abroad also come with a 2% fee for debit cards and a 2.99% fee for credit or Gold cards.
This means that first direct doesn’t offer a competitive service suitable for travelling and offers a largely similar service to that of conventional banks. Thumbs down.
Who owns first direct?
first direct was founded in 1989 by Midland Bank that became part of the HSBC in 1992 which it still is. It started out as telephone-based, then introduced SMS banking in 1999 and started limited trials of internet banking in 1997. The full online service was launched in 2000.
How is first direct regulated?
If you’re not aware, first direct is a division of HSBC UK Bank and is regulated by the Financial Conduct Authority (FCA) and authorised by the Prudential Regulation Authority.
Unlike some newer digital banks, first direct is a banking institution and has been in business for more than 30 years.
Is my money safe with first direct?
When you sign up for first direct online banking, you are asked to provide a selection of documents that verify your identity. This is to protect you as much as possible against fraud and financial crime.
It’s also possible that first direct will request you to provide these documents again at some point in the service to make sure everything they have on you is up to date. It’s worth saying that first direct makes it as convenient as possible to submit these documents using an online document tool.
first direct has full FSCS (Financial Services Compensation Scheme) protection, which means that every customer deposit is compensated up to £85,000. This is a gold standard amongst UK banks, designed to safeguard customer finances if the bank goes bankrupt or insolvent.
first direct uses many methods to ensure customer safety when using their service. They will occasionally text customers with a message to confirm if they actually made a transaction.
These texts are simple to reply to, usually asking for a Y or N reply. Your response will dictate if first direct places a block on your card instantly. The app also uses the timeout method to ensure the security of your sessions. Once you stop interacting with the app they will sign you out automatically.
first direct has only a 1.8-star rating out of 5 on Trustpilot, with 20% of 3.351 reviewers giving it an excellent mark and 61% a bad one. With a score of 1.8 stars, first direct is worse than all other competitors such as Monzo (4.5), Starling (4.3), and Revolut (4.4), for example.
Most of the bad reviews mention the “botched” transfer to Mastercards and long wait times for customer service presumably because a lot of people are having issues with their new cards.
The best way to contact first direct would be to live chat with them or to send them a message through the app as well. You can also tweet them @firstdirecthelp, send them snail mail at: first direct, 40 Wakefield Road, Leeds, LS98 1FD.
They also have numerous phone numbers depending on your type of issue. Find them on their website.
first direct alternatives
Revolut is one of the biggest challenger banks in the UK and offers many features to their more than 15 million personal and 500,000+ business customers.
Monzo is another popular bank in the UK that gives many financial products such as current and savings accounts, as well as loans and overdrafts. All your deposits are insured for up to £85,000.
Starling is winning many awards in the UK for its overall service and its individual products. Its personal account is free with no monthly fees and other charges are scarce as well. It might not offer all the bells and whistles as high street banks do, but it’s an excellent bank account and one of the best if not the best bank accounts in the UK, period.
We recently covered Wise in a full review and its low money-transferring fees and the ability to hold, receive and send money in 55+ currencies. It’s excellent for travelling but also transferring money to many countries.
The bottom line
first direct has a great reputation as one of the first true innovators in financial services, not only in Europe both worldwide. Their service gives many long-time customers with peace of mind in their well-established internet and phone banking services.
The first direct app makes all your day-to-day banking needs straightforward and fast; however, there is little else to do beyond the traditional banking functions.
The upcoming budgeting features will surely add more depth to their service. We are excited to see which features and tools this will incorporate to help their customers manage their finances. For now, we can see that we’ll get spending insights, transaction organisation, and push notifications. All the things that digital banks have from the get-go.
first direct is one of the few digital banks that offer a comprehensive online banking service, with choices of first direct current accounts, savings account, credit cards, investments, loans, mortgages, etc. It’s handy to have all of these accounts in one place on the app.
first direct is worth looking into if you consider making your first venture into digital banking or require more than just the current account offered by many other digital banks.