What Is a Bank Reference? | Banking Basics

In this article, we’re answering “What is a bank reference?”

First, the term “bank reference” can have several different meanings. In this article, we’re going to discussing references in the context of new account opening.

In other words, we’re looking at the common requirement of providing a reference when you are applying to open an account at another financial institution.

This article is part of our free series on bank reference letters which you can access by clicking here.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. What Is a Bank Reference?
  2. Who Can Request Bank References?
  3. Frequently Asked Questions
  4. Do You Want Help Opening Bank Accounts?

What Is a Bank Reference?

A bank reference is a formal statement from a licensed financial institution that confirms an individual’s status as a customer. The contents of a bank reference letter will depend on the bank reference policy of each financial institution. 

Beyond the definition of a bank reference, the actual purpose of bank references is to provide financial institutions with additional information about prospective customers behaviors, account balances, and longevity as a depositor.

That said, bank reference requirements are also common outside of banking. In fact, the importance of bank references are also acknowledged in the workplace and commercially. So, it’s not surprising that it’s common to see a bank reference for employment or a bank reference for business purposes as well.

If you are wondering how to request a reference, the answer is “it depends”. In most cases, financial institutions will have a bank reference form or bank reference process you will need to follow to obtain an official letter.

Importantly, most financial institutions simply provide a completed reference template. In other words, you will not receive a one-off letter from your account manager detailing your best qualities as a customer of the bank.

Who Can Request Bank References?

References can be requested by anyone with an account at a financial institution. However, certain banks do charge service fees for preparing and issuing letters. So, it’s important to confirm whether your financial institution charges any fees for issuing a reference, prior to requesting.

For reference, fees for reference letters are commonly charged by financial institutions in small offshore jurisdictions. This is because they are commonly used for short term account opening in order to obtain references, which can then be used to open elsewhere instead.

What Should I Put for Bank References?

Depending on your circumstances, references will typically need to be an account manager, branch manager, or official at a financial institution where you have an account.

Not surprisingly, if you are opening a business account, you will be asked to provide business references. Likewise, if you are opening a personal account, you will be asked to provide personal references.

Who Should Sign a Bank Reference Letter?

In most cases, you will not have a choice who to put as your reference. Instead, your bank will provide you with a completed template, filled in with your information, and signed by an authorized representative of the bank.

In certain instances, your direct account manager or relationship manager will verify and sign-off on the reference letter. However in other instances, it’s possible that the bank will simply stamp the letter with the bank’s official seal.

For this reason, it’s important to confirm with the requesting financial institution, employer, or commercial partner, whether they require an individual to sign the letter directly or if a standard (non-personalized) letter will suffice.

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Frequently Asked Questions

Below are a few of the most common questions we receive from people looking into this topic. If you have further questions you would like to ask our team, don’t hesitate to get in touch.

Where Do I Find My Bank Reference?

If you are opening a new bank account, your bank reference will be an account manager at a financial institution where you have an existing account. That said, the actual reference they provide is typically a standardized letter with basic account information.

What Is a Bank Reference On a Rental Application?

On a rental application, a bank reference refers to a letter that is issued by a financial institution to confirm that your accounts are in good standing. Property managers and owners require referencess to make sure that you have a stable relationship with a licensed financial institution.

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GlobalBanks Team
GlobalBanks Team

The GlobalBanks editorial team comprises a group of subject-matter experts from across the banking world, including former bankers, analysts, investors, and entrepreneurs. All have in-depth knowledge and experience in various aspects of international banking. In particular, they have expertise in banking for foreigners, non-residents, and both foreign and offshore companies.

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