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Bank Charges

gleneagles
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Bank Charges

This subject has come up many times over the past few years but banks are now claiming they are losing money on many accounts and HSBC has indicated charges might apply.

No bank wants to be the first but if there was general agreement amongst the banks charges might become a reality and once introduced will almost certainly remain.

It would be very difficult to manage without a bank account as pensions, wages are no longer paid in cash and some payments can only be made via DD or standing order.

In short most people are stuck, whatever the banks decide to charge it’s hard to see any other option but to pay it and no doubt once introduced will increase over time.

We are born into history and history is born into us.
16 REPLIES 16
shutter
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Re: Bank Charges

Hmm.. I seem to recall, that there were always "bank charges" ... and only in "recent times" (possibly the last 20 years or so) have the charges for using a "current account" been "in abeyance"...

I suppose you have to be a bit practical about it... If I were to let you look after my money.. and say to you.. pay my ISP on such a date.  pay my Electric on such a date...etc.. you would not want to do that for nothing... on the other hand... you are at liberty to "invest" my money wherever and if you make a profit, you can keep that..  but you have to accept the risk that if you don`t, or lose my money, then you are liable to return it.

 

tricky situation .. ( other bank charges, for overdrawn accounts and special services probably still apply)

idonno
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Re: Bank Charges


@gleneagles wrote: In short most people are stuck, whatever the banks decide to charge it’s hard to see any other option but to pay it and no doubt once introduced will increase over time.

Of course, its what happens when you allow companies to gain a monopoly of a the situation. Before you had cash, then they introduced bank cards, DD, payment by mobile - all in the guise of saving you time and money. It reality snaring you into their business model. Looks like its payback time. In the Far East its not unusual to pay for a bank account so its something that isn't unheard of for me.

 

But its the same with banks in the UK that have charged for quite some time. Santander for instance charge but they used to give a nice amount of interest on the money to make up for it. Over the years though, its slowly been altered, less and less. They think (and properly so) that a fair number of people won't move their money. I'm not one of those and have been moving money out of savings accounts for some years.

 

Best investment so far has been Gold but then I bought some (not just the paper certificate) when prices were low. $1000 per oz. is a nice return in less than 2 years. Some of my money has gone into premium bonds but whether the returns will match the savings rate (after the recent slashing of prizes) who knows.

 

As I'm constantly reminded there is no such thing as a free lunch. Dead right.

Ever helpful. Grin Sure, I’d love to help you out. Now which way did you come in?
billnotben
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Re: Bank Charges

It all sounds very fair. Banks want your money. They want to use your money as they see fit to make money for themselves.

And now they want to charge you for the privilege of letting them have and use your money.

Yes it all sounds very fair in a cake eating sort of way.

Jonpe
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Re: Bank Charges

Many banks, like Santander, offer a current account that pays (or used to pay) decent interest but there is a monthly charge, you must have a certain number of DDs etc.  They also offer a more basic account that only allows you to perform banking functions.

Back in the 1970s and 80s Barclays used to charge a certain amount for each cheque (or was it transaction?).  However, they also calculated interest (at 6%, those were the days!) against which the charges were offset.  This interest was never paid to the customer but was simply a mechanism for determining whether to charge you for banking with them.  They also advertised that as long as your balance never fell below £100, banking with them was free.

As for all banks agreeing to charge fees for current account banking, wouldn't that be anti-competitive, like the cartels airlines used to operate whereby a flight from, say, London to Paris always cost the same whether you chose BA or AF?

 

7up
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Re: Bank Charges

I don't see any way to escape the banking charges other than to open accounts with overseas banks - or starting a national petition on change.org. The banks will be weary of doing this as they know the british public will be livid after the bailouts etc.

 

What interests me is the talk of negtive interest rates. Does this mean the banks will credit those with overdrafts? - In mathematical terms if you subtract from a negative number the double negative becomes a positive.. Interesting thought given that several high flyers have large overdrafts - look at Fergie for instance, she once had a £4million overdraft.

I need a new signature... i'm bored of the old one!
salmo
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Re: Bank Charges

@billnotben

 

 

Jonpe
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Re: Bank Charges

The clearing banks may not be in need of funds at the moment but building societies seem to be competing for customers by offering (for a few weeks or even days) accounts with good interest. Time will tell how long these rates are maintained, but once they drop it's time to move your money to another one offering more interest.

salmo
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Re: Bank Charges

@Jonpe 

I'm struggling to find a good interest rate with a building society. I need easy access and 1% is the best I can find and as you say it was withdrawn quickly. If you know of any better please let me know.

I have three regular savers paying more. One pays 3% but as the most you can put in is £50 per month it will earn £9 interest by the end of the year.

 

Jonpe
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Re: Bank Charges

Having missed out on a couple of accounts that were only available for a short time, I've now started checking the best rates on the moneysavingexpert website (Martin Lewis) on a daily basis.

As I understand it all accounts must now allow you access to your money at any time.  The way the building societies/banks deal with this is to penalise you by deducting a certain number of days interest if you make more than the permitted number of withdrawals per year, or close your account before it 'matures'.

I wouldn't touch my ISA money unless I move so I put that in an account that only allows three withdrawals per year.  Most of my other savings are in an account that only allows two withdrawals per year, with an emergency fund kept in an easy-access account earning 0.6%.  I only have one regular saver which I only opened after the interest rate had dropped from 2.5% to 1.85%, but I am contemplating opening another regular saver although they only allow a small monthly deposit and the interest rates are rarely more than 1.5%.

This sounds like I have a lot of money, but I no longer earn enough to have much left over to save so it's just the same savings being moved about chasing the best returns with no, or very little, risk.

Headline on the front page of one of the newspapers today claims that mortgage applications are on the increase so the lending institutions are going to need our money to fund the extra lending.

gleneagles
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Re: Bank Charges

@Jonpe 

Mortgage applications might be on the increase but in these uncertain times I guess the banks will be very selective in who they lend money too.......

People who borrow money are likely to find they need to make a much bigger deposit than in the past thus putting property out of the reach of thousands more.

We are born into history and history is born into us.
Jonpe
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Re: Bank Charges

Yes, and 'affordable' flats start at over £400,000 in this area.

Champnet
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Re: Bank Charges

Banks can borrow money from the Bank of England at a rate far lower than they’ll pay the public....

HelloDuck
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Re: Bank Charges

Nationwide Building Society rules out charging customers for everyday banking after holing secret review 

 

https://www.thisismoney.co.uk/money/markets/article-8900395/Nationwide-rules-charging-customers-bank...

 

HD

billnotben
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Re: Bank Charges

As Nationwide customers are in effect their "owners" I assume something like this, if it did happen, might be pushed to require a vote.

Even if it didn't you can bet at the next member vote the current board would be asked to take a "walk".

 

"having no current plans" but having a secret review to discuss this doesn't quite gel.