The End Of Free Banking?

[youngmafbog]

"City watchdog clears way for end of ‘free banking"

No surprise to me, I recall saying this on thes pages in the past.  Time for people to start paying their way, too much 'free' stuff these days that is not free but paid for by others.

https://www.express.co.uk/finance/personalfinance/1877541/FCA-ends-free-banking

[davebro3]

//"It's not free really because they hold a lot of money in all types of accounts on which they earn interest."//

"Simply not true"

If it's not true how do the retail banks earn the money to finance their operation, pay their staff & make profits to pay shareholder dividends? It doesn't grow on trees does it!

And if current accounts are so bad why have banks been so keen to attract new customers by offering cash incentives to switch accounts? I now have 3 current accounts and have switched numerous times over the past few years.

[rowanwitch]

I pay a monthly fee but it is invariably covered by the cashback deal.  No plans or credit card, and rubbish interest in savings so a review is due.  Not that anywhere offer a reasonable return at the moment.   In an unstable world gold becomes more tempting.

[youngmafbog]

//The tax payer saved most of them in the financial crash of 2008. They have used new technology to cut thousands of jobs and ditch thousands of branches in every town.//

Well how wrong can you be, some Retail Banks were bailed out but it was the Investment side that caused the problem. Very few Banks have new tech, the core of Bankning tech is 40 years old.

Branches cost a lot of money, many dont want them anymore and the cost for the few that do exceeds what is earnt.  No responsible company throws good money after bad or they will fast go broke.

[youngmafbog]

//If it's not true how do the retail banks earn the money to finance their operation, pay their staff & make profits to pay shareholder dividends? It doesn't grow on trees does it!//

Most Banks earn money from profit on side hussles like Insurance.  They also make a lot from loans and Mortgages but the money mostly comes from cash bought on the market, especailly for fixed rate rather than use punters current account money.  The reason they want you on board is becasue many are lazy and will approach their Bank first for such services.

Current accounts are generally loss making or break even at best.

What is now missing of course is the Giro Bank, really a Government Bank should be created for those that dont have a pot to pee in.

[barry1010]

I like the idea of these new fangled banking hubs where banks share the same space on the high street.

I haven't had reason to go to a bank for years  but it is essential that those who need to, can.  Shared space is a great solution 

[barry1010]

Young, most banks offer basic accounts that have a debit card but no overdraft and no fees.  Even homeless, unemployed people can apply for one if they can prove their identity, no proof of address needed.

I can't see the need for the government to create such a bank account.

[youngmafbog]

//I can't see the need for the government to create such a bank account.//

At present no, but look at the OP, they may charge in the future.  It's the sort of account you mention that costs them money.

Remember Banks love you to have an overdraft(Approved) that is where they get money from punters.  Those just bubbling along cost the Bank money.

[barry1010]

I agree that people with basic bank accounts don't make them money although they do make a few pennies every time a debit card is used to pay for goods and services.  

[Untitled]

So long as we have a state owned bank that offers the service for free then fine 

if not then no... the reality is that it is not possible to function in modern society without a bank account and therefore those that provide them have an obligation that is more important than profit. banks make plenty of money anyway so if they don't like it then tough

[Untitled]

"Those just bubbling along cost the Bank money."
 

oh boo hoo lol. won't someone please think of the suffering bankers 🙄

[davebro3]

I think the OP is carrying a torch for the bankers. 🙄

[ToraToraTora]

ah untitled you just can't keep the communism under the bed can you! When you run a business It's not ideal that certain sections lose money. People like me who haven't paid a penny in charges for years are the ones that cost they do all the work for no money. I would not be surprised if they did target those that they make nothing out of and that are in effect subsidised by those that do pay charges.

[Untitled]

banks were making record profits last i checked tora so i really don't care if they're losing money on savings accounts... they're doing just fine. if banks are determined to introduce charges then the state needs to either set up s competitor who does not charge or force them to offer current accounts for free. banks are not just businesses they are a core part of this country's infrastructure and people cannot choose not to use them... so treating it as a marketplace simply is not valid. 

[ToraToraTora]

untitled: "banks were making record profits last i checked tora so i really don't care if they're losing money on savings accounts... " - who's talking about savings accounts? I'm talking about current accounts, ones with hundreds of transactions, DDs etc. They provide a great service full internet and phone banking etc all buck shee. Yes they can afford it and I am glad they do not charge but I would understand if they did.

[davebro3]

All said & done there is & has been nothing to stop banks applying charges (or just nominal amounts) for years. I expect this to continue to be the case. Nothing to see here.

[ToraToraTora]

untitled: "...so treating it as a marketplace simply is not valid. " - the communism is written through you like a stick of rock!

[naomi24]

//we should have let them die of their own incompetance//

 

When banks go down the plughole the little man's money goes with them.

[ToraToraTora]

Davebro, yes free banking will continue for now, the main thing that stops them charging is the competition among themselves. In the past they operated a bit of a cartel in that area.

[Untitled]

you don't understand what communism is toratoratora. have a lie down.

[ToraToraTora]

🦆There goes that duck again!