We’ve all become accustomed to getting added services when we pay for bank accounts, with the range of extras depending on the level of fees or the amount paid into the account each month. However, there is usually an option of free banking for those who want a no-frills approach – but a recent report indicates that this may not be the case in the future.
According to a report in the Financial Times, the days of not being charged for a standard bank account appear to be numbered. This is partly because of low interest rates – the profit that banks make is the difference between what they charge borrowers and what they pay savers. So, with the current rates very close to zero, there is little room for manoeuvre, and the position has been made worse by regulators, who have taken steps to prevent banks from boosting their earnings by charging for other services, such as unarranged overdrafts.
While there is a legal requirement to offer free banking, this looks likely to apply only to the most basic accounts, with fees applied for additional services, such as cheque books, overdraft facilities, replacing lost cards or even for cash machine withdrawals above a specified limit.
Although advice on bank accounts is not part of the independent financial advice we offer to people in Shropshire, it is an area that is worth keeping under review to ensure you are not paying for services that you never use.
