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Death of universal free banking?


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Taking £200 out of my bank this morning.

Wondering when the free accounts are going to stop.

I more or less expecting my account to cost me £5/m. Thats fine, its useful service. Im sure Ill get some useful stuff thrown in.

But the death of free banking, now the leverage has been seriously ranked down and the regulation cover the other money making scams - see last 30 years - has ended.

I reckon HSBC will the first. Then the rest will follow, rapidly.

Therell be a hoohaa, mainly oaps, and the Post Office (BOI) will be required to offer a basic free account. All the OAPs will pile into it, so the youner people will leave.

 

 

 

 

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16 minutes ago, spygirl said:

Taking £200 out of my bank this morning.

Wondering when the free accounts are going to stop.

I more or less expecting my account to cost me £5/m. Thats fine, its useful service. Im sure Ill get some useful stuff thrown in.

But the death of free banking, now the leverage has been seriously ranked down and the regulation cover the other money making scams - see last 30 years - has ended.

I reckon HSBC will the first. Then the rest will follow, rapidly.

Therell be a hoohaa, mainly oaps, and the Post Office (BOI) will be required to offer a basic free account. All the OAPs will pile into it, so the youner people will leave.

 

 

 

 

I pay £5 per month but get around £6 in direct debit rebates.

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I use cash wherever and whenever I can and have done throughout the "pandemic".  I don't care if they don't like it as if we don't use it we will lose it.  Then one of our last freedoms will be lost as all financial transactions will be online.  No more cash payments for tradesmen etc.  Everything will be taxable.

I should imagine they will start to introduce a fee for basic accounts soonish.

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Back in the early 90s credit card companies started charging a £10 annual fee; and then stopped.

Current accounts are loss making now because interest rates are so low that the banks don't need your deposits but still have the costs of account administration, maintaining a network of Cashpoints, sending out statements, maintaining software and call centres etc.

If interest rates returned to a typical 5% than a £2k account balance earns them £100 a year to defray the running costs.

Also they like current accounts because it gives them opportunities for cross-selling.

It will be a brave first bank that starts to charge in an overt fashion for simply having an account because their customers will walk.  I expect that they will be more creative in this.

I receive a monthly paper bank statement and do not do internet banking; I think it very possible that I will receive a letter informing me that the statements are now chargeable at £10 a year or more.  Hargreaves Lansdown did similar about five years ago: no more half yearly statements unless you want to pay for them.  All reports are available online.

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Could be they don't charge a set fee but do pass on negative interest rates on current balances above say £1k which most 'hard working families' will rarely exceed when they're living hand to mount with all the monthly direct debits for things from mortgage, to car, to mobile phone. With those people the banks already get overdraft fees so they'll not be losing out.

BoE recently been on about negative rates (unless I dreamt it) so not sure if they see it as the next step.

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6 hours ago, wherebee said:

charging annual or monthly fees for an account is standard in Oz, Can, USA, HK, etc.  high balances normally get you a reduction/exemption.

 

It's surprising the UK has stayed with free banking.  doesn't make any sense in a world in which retail deposits have not helped bank balance sheets for 10 years.

Thats my thoughts.

Bank branches -when banks used to have load - were just an OAP day care centre.

I mention HSBC as they are much more likely to be the first to move to charging.

 

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