Forum Topic

Say goodbye to free banking???

The banks are in court today defending their charges for overdrafts. If they lose the case, as is expected, what's the betting that free banking will become a thing of the past? They will recoup their lost 'earnings' in charging for cheque books and cards, statements, standing orders/direct debits. A few banks have already announced the end of free bank accounts.

David Archer ● 7006d31 Comments

So David, what's a good bank to transfer to, if one is an account holder at one of the big 5 banks and want's to have free banking?

Gerry Tan ● 7006d

I've been with First Direct for years (owned by Midlands/HSBC). Always been happy with their service but they recently announced they would end free banking! What!!! However, there is a way around it. Open a savings account with them and deposit £1 and the current account is free. Or apply for their credit card and use it once (again...current account will be free).I wouldn't jump ship yet Gerry until your bank announces their plans. Banks certainly have changed over the years. I went into HSBC in Ealing last week to pay in some cheques. It was like going into Top Shop or HMV!!  Capt. Mainwaring would turn in his grave.

David Archer ● 7006d

"Capt. Mainwaring would turn in his grave."I must agree, I'm p*ss*d off with the big banks these days. I sometimes feel like going in there with my bayonet attached to my old rifle - "They don't like it up'em Sir!";-o

Gerry Tan ● 7006d

I suppose in situations such as this, it's worth keeping an eye on the MoneySavingExpert.com website.If banks do decide to end free-banking, surely there'll be competition between banks to lower their charges if people start to move elsewhere, and maybe the ones who maintain high charges would be forced to reduce these if they wish people to remain banking with them

James Lockwood ● 7006d

Sod the greedy banks.  They already make money by investing our money, shouldn't that be enough?  On top of that they add exorbitant bank charges & may possibly start charging fees now...I'm going to start keeping my money in my knickers!!I'm with First Direct too David & joined them at their inception.  I remember one of their selling points was that as they didn't have branches they didn't have the overheads so could offer better interest rates on their accounts.  As they still don't have branch overheads I can't understand why they were the first to end free banking!  Like you I've opened savings accounts, but I'm keeping my eye on them.

Lynn Clark ● 7006d

Many of us over the years have had money on deposit with banks in current accounts and been not paid a penny in interest. If we had money in savings accounts we were paid low rates of interest. If we had to borrow, we were charged high interest rates.

David Giles ● 7006d

First Direct is lovely but you have to watch it or it will, I suspect,  grow up to be just like its parent bank!  I favour the sock-under-the -bed  approach.Marjorie

Marjorie Meek ● 7006d

Lynn said:"...I'm going to start keeping my money in my knickers!!"Well Lynn, I hope you don't wear those scanty incapacious thong things. I'd be alright, if I had any money(which I don't), 'cos I still sport those usefully capacious long-johns. Mind you I'd be afraid of the botton flaps on mine, should my bank manager take down my particulars. :-(

Gerry Tan ● 7006d

...Bridget Jones has nothing on me!  ;-)

Lynn Clark ● 7004d

Oh, Ealing, Ealing, Ealing, Sigh!;-)

Sarah Felstead ● 7004d

Please explain the sigh Sarah.

Gerry Tan ● 7004d

... its not me that needs to do the explaining!  ;-)

Sarah Felstead ● 7003d

Sarah, I still don't understand.  :-(

Gerry Tan ● 7003d

.. shame.  See you over on the garden thread, Gerry.

Sarah Felstead ● 7003d

Oh for goodness sake, it's only a bit of fun Sarah! ;-)

Lynn Clark ● 7003d

Well, I shall thank goodness, for that!  ;-)

Sarah Felstead ● 7003d

But 'free' banking isn't actually free...In most cases current accounts pay little if any interest. Due to the rate of inflation this means that in most cases if you keep funds in your current account for any length of time you actually have less money (at current purchasing power value) than you had previously.For many people the potential return from having a competitive rate of interest on the funds in their current accounts would by far offset the cost of a small monthly administrative charge.

Toby Lovern ● 7003d

You'll like this one (not!).http://www.fool.com/m.asp?i=2345617&u=43025762

Tony Wood ● 6957d

Why should customers get away with free banking...serves them right if they go for unauthorised overdrafts. Monthly budgetting isn't nuclear science...just spend what you have and no more...simple. Why should prudent customers help pay for spendthrifts? Bah, charge them heftily is what I say!  :-(

Gerry Tan ● 6957d

Good Morning Gerry?

Tony Wood ● 6957d

The top of the mornin'to you too Tony!

Gerry Tan ● 6957d

"It's the rich what gets the gravy, the poor what gets the blame.It's the same the whole world over, isn't it a blooming shame."

Peter Wright ● 6957d

Amen to that Peter...This snippet sticks in my craw a bit as well,even once wealthy organisations can it seems run out of money through there own daft actions (thats not rocket science either Gerry)but instead of being berated and left to rot like the rest of us would be,the Bank of England is throwing more of our money at them.If/when it all goes sour,I don't doubt that they will find a way of re-couping there losses from us.http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyid=2007-09-14T093837Z_01_WLB1909_RTRUKOC_0_UK-NORTHERNROCK-FUNDING.xml&src=nl_ukdailyinvestorI'm going in the garden to eat worms now.

Tony Wood ● 6957d

The banks have lost their test case - the ruling is that bank charges are unfair.

Peter Wright ● 6734d

So?Banking was never free anyway - I don't think there's a problem.Keep it in a bag under your bed. No probs.

Gerry Tan ● 6734d

http://news.bbc.co.uk/1/hi/business/7364422.stm

Peter Wright ● 6734d

Surely it is not that bank charges are unfair per se but rather that the sum,  in some instances,  is excessive and therefore unfair. In other words the banks do and still can charge for unauthorised bank overdrafts BUT the sum they charge must be reasonable.

D Moore ● 6734d

I'm old enough to remember that banks brought in charges in the early 70s; anyone who threatened to move their account was swiftly promised free banking, and the whole idea died out in no time. A similar thing happened when banks started charging you to use another bank's ATM about five years ago.As for whether banking is currently free or not. It's hardly unreasonable to forego a bit of interest in exchange for cheques, standing orders and so forth. These things cost the banks money and they're not charities.

Susan Kelly ● 6734d

I'm all for reasonable charges by banks. However, despite giving us standing orders, direct debits, security and other services, I do think they should offer better interest rates on one's current accounts.Then of course, there are the errant and profligate customers who frequently go into the 'red'. The message therefore is clear - don't spend what you ain't got! Simple!  :-(

Gerry Tan ● 6734d

There is no free banking, only hidden charges. The delay in clearing cheques and in making electronic transfers between banks mean they they utilise your money when you cannot touch it.

Graham Weeks ● 6734d

Abbey said they would charge £25 just to send the sum of £100 to my sister's bank account in Australia! The transaction would also take up to a week. This charge seems excessive to me. Barclays charged £20 to send the same amount - even trhat is expensive in my opinion.

Robert Julian Fernandez ● 6734d