Is this the end of free banking?
Thu, 17/01/2008 - 14:43
Banks use our money to earn themselves nice fat profits and bonuses - so no they should pay us for our hard earned money by offering decent interest rates on their current accounts. Going overdrawn is a fact of life and sometimes cant even be helped so banks need to be more understanding and not use peoples situations to make even more money. If one bank got rid of all its free banking then it would be shuned - like Northern Rock all over again with people queuing up to take out their money. It won't happen, and it shouldnt happen!!!! Free banking is one of the few advantages of living in the uk
Thu, 17/01/2008 - 14:55
let's face it, banking isn't free at the moment - while we may not pay a monthly fee we still end up paying for the service with expensive overdraft charges and low levels of interest on our balances. Banks have so many ways to wheedle money out of us that I'm beginning to think a straightforward monthly fee would be a bit more upfront and transparent. Maybe then people would trust their banks a bit more?
Thu, 17/01/2008 - 16:01
I wouldn't mind paying a small fee for banking if i actually got something in return, because at the moment i don't.
I think customer service needs to improve dramatically in the uk if people are going to accept being charged. I've had frequent problems with natwest - it's mistakes have often caused me to go overdrawn. They are very quick to slap on a penalty fee but not so quick to solve the problem and refund it.
Thu, 17/01/2008 - 16:32
I pay for my banking with a Barclays graduate account and it costs £5 a month. I get a massive overdraft interest free and bonuses like free mobile phone insurance. It is only £5 and i think it is worth it. Like mattyboy, says an upfront fee is more transparent than just lots of underhand charges and penalties!
Thu, 17/01/2008 - 17:42
I don't see the problem with charging penalties for unauthorised overdrafts, as long as the client is made aware that this will happen if they don't manage their money. I don't agree Max A that going overdrawn is a fact of life - sure things get tight at times but one should not live beyond ones means - and for most of us (i.e. salary earners) our "means" are pretty obvious. Penalty charges make more sense than monthly fees.
Mon, 21/01/2008 - 15:06
I would be happy to pay a reasonable fee provided that I received a reasonable rate of interest on all money that was in my account and did not lose interest on money that was in transit. Why does it still take 4-5 days to transfer money from one account to another?
Thu, 24/01/2008 - 15:16
I don't think it's a question of being irresponsible and spending money we don't have, lefras... I earn a decent wage and I have essential monthly payments like bills and my mortgage. But some of my direct debits (life insurance for example) come out just before I get paid so now and again I do go overdrawn.... I noticed in the "round up of bank charges" article on moneywise that some banks don't charge you if you repay the money the same day - but I don't always realise that I've gone overdrawn and by the tim I check my statement online its too late!
Penalty charges don't make more sense than monthly fees - £5 a month for a bank account is reaosnable given the extras you get with it.... being charged over £100 for going overdrawn is just stupid! I have banked with the same bank all my life and I give it alot of business (credit card, loan, mortgage etc) yet it just frisks me for cash when I make a tiny slip up.
Fri, 25/01/2008 - 16:44
On the whole I am as fed up at being overcharged by big companies as the next guy, and I have no affinity with banks, let me assure you. I guess the reason for this exception is that I understand an overdraft (the authorised one, that is) to be a facility a bank affords you in order for you to manage the timings of your income and expenses – classically an overdraft should be roughly a month’s salary in size, so that if direct debits and other payments come off before salary date, you have an authorised facility which ensures these payments are honoured until your salary comes in. Having been granted this facility, it seems to me within a bank’s rights to penalise someone who goes beyond the agreed limit, although I agree with Max A that there should be a certain amount of grace extended, especially when the customer is not frequently overdrawn. Some other countries’ banks are far more stringent – penalising the customer AND dishonouring the direct debit request meaning your credit record is also in peril if it happens to be mortgage or credit card payments that are left unpaid. It comes down to managing your money – check out the MW video on this issue – relevant to our discussion. Like the presenter…reminds me of fearless reporter Lois Lane with a twist of Bridget Jones http://www.moneywise.co.uk/news-views/tv/2008/01/21/the-great-bank-rip
Vote now on our poll
Are supermarkets profiteering from food price inflation?
Yes
88%
No
13%
Total votes: 24
What our users are talking about
Moneywise
News, articles, advice and guides from everyday money issues to how to grow your money. Covering all aspects of personal finance, Moneywise offers independent news and views, forums and blogs, as well as unique compare and buy comparison tools.
Moneywise distributes services supplied by Interactive Investor. Interactive Investor Trading Limited, trading as "Interactive Investor", is authorised and regulated by the Financial Services Authority. Copyright © 2008 Moneywise. Terms & Conditions About Contact us Subscriptions
Free banking is something we take for granted in the UK - but with banks in court over the legality of unauthorised overdraft charges some people are predicting that in the future we may have to pay for current accounts.
The logic is thus - if banks can't make money through overdraft penalties (bearing in mind these fees bring in around £3.5 billion a year) then they will make it elsewhere, possibly by charging their customers for the pleasure of looking after their cash.
So is the era of free banking in the UK coming to an end?
Should current accounts be free? Or would you be happy to pay for them?
Let us know your thoughts...