Why free bank accounts will have to go to spur competition in banking | City A.M.

[Legal Beagles]

But the CMA is also concerned that free in-credit banking – the majority of current account holders don’t pay an obvious fee – may be distorting competition. It could be right. The UK is unusual in having this model. Indeed, the Bank of England’s Andrew Bailey argued in 2012 that free banking is “a dangerous […]

More...

[meellis]

Re: Why free bank accounts will have to go to spur competition in banking | City A.M.

Since I was made bankrupt and actually understood how difficult it is for a lot of people to actually get a bank account let alone chose between ones I guessed it wouldn't be long until they tried to get rid of free ones. My major concern is that the country seems to be pushing to make everything go over to D/D, S/O, contactless payment, phone payment and cards that cash is worthless or at best expensive so those who can't get accounts will be further victimised.

[Amethyst]

Re: Why free bank accounts will have to go to spur competition in banking | City A.M.

Funnily enough I was reading a BBA report this morning about competition and there's some figures quoted (will dig them out in a bit) which show revenue from PACKAGED ACCOUNTS on unarranged and arranged overdraft charges is much higher than for standard accounts, so not only are you paying a fee for having the account you're actually likely to be paying more for your overdraft fees as well.

I have a basic account.

[Amethyst]

Re: Why free bank accounts will have to go to spur competition in banking | City A.M.



Unless I'm reading it wrong?

[EXC]

Re: Why free bank accounts will have to go to spur competition in banking | City A.M.

In all 3 of those examples banks are still making more in net interest income (as they were in the PCA Market Study in 2006) than unarranged overdraft revenue despite interest rates being at an all time low.

And people still think their account costs them nothing if they stay in credit but in fact banks make more from those people than those in debit.

[enquirer]

Re: Why free bank accounts will have to go to spur competition in banking | City A.M.

More doublethink.

They have previously admitted that they want to take a cut out of everything. You pay money in - they take a percentage. You leave it there - they take a percentage. You take it out - they take a percentage.

In any event, your 'free' account isn't free. You might pay no charges, but your deposit is lent to them for nothing.