Was There Ever Such A Thing As Free Banking?
There seems to be a wave of change sweeping through the banking sector, after the charges debacle, and we are slowly being fed the line that free banking will be ending soon and we will all be expected to pay monthly charges to retain our personal banking facilities. However, when you take a step back and think about the situation, have we ever really had free banking? What exactly is free about the banking system we have now?
While the banks are very keen for us all to deposit our money with them, let us not forget the often derisory interest rate many savers are receiving on deposit. So how can the banks explain the following as free banking :-
Statement Charges
Many banks are now charging use for receiving statements showing how much we have on deposit, the movement of our funds and the interest earned.
Cheque Clearance
While cheques are slowly being phased out of the banking sector let us not forget that very often funds for transfer can be in ?limbo? for up to 5 days when neither the sender or the recipient will be earning interest on the money ? but the banks do.
Fund Transfer
If you need to transfer funds immediately the banks can charge you upwards of ?25, a fee which is based upon the old backing system of 20 or 30 years ago and in no way reflects the computerised system of today whereby money can be transferred immediately.
Funding The Banks Business
The main purpose of a bank is to attract depositors and then use that money to lend to customers at a higher rate than the depositors are receiving. Very rarely do we see a note of this profit margin between the two rates ? in affect we as customers are funding the banks, who then threaten to charge us more!
All in all when you look at the facts there has never been ?free? banking in the UK and while the banks may well try and push charges upon us over the next couple of years, how can they really justify it? The frightening thing is that they don?t really need to!
