Nationwide to ban small withdrawals
Nationwide is to ban customers from taking out less than £100 in cash over the counter at its branches.
The new rule will come into effect from 7 June. Customers with cash cards who want to withdraw less than £100 will have to use a cash point. However, customers using a debit card or passbook will still be able to withdraw smaller amounts of cash over the counter.
Nationwide says the changes are necessary to reduce queues in branches, but both customers and experts have criticised the move.
One customer told Radio 4’s Money Box that his elderly father would not feel safe taking out cash from an ATM and would have trouble remembering his PIN. As a result, he might have to stop doing his own financial transactions.
But Nationwide's divisional director of the branch network, Graeme Hughes, told Money Box that the change was essential. He said about a third of all counter transactions are carried out by less than 8% of the building society’s customer base – and the remaining 92% wanted see shorter queues in branches. He said those affected could change accounts or use cash machines.
Nationwide is also changing the maximum amount that can be paid in via cheque at its FAST/Selfserve machines. The current limit is £10,000 but will drop to £1,000 – meaning customers paying in cheques of over £1,000 will have to queue at the counter. Nationwide says this is to reduce fraud.
Nationwide is also introducing a £10 charge for drafts of less than £1,000 obtained at the counter, and the same charge for stopping a cheque.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.