How nine in ten current accounts charge a monthly fee
The concept of free banking is a ‘myth’, an investigation has found.
Nine in ten current accounts charge fees, either via a monthly fee, or for using an overdraft.
Eight in ten fee charging bank accounts also pay no interest to customers in credit, while penalising them for going into the red.
A file photo of a woman withdrawing money at a Royal Bank of Scotland cash machine
Those who already pay regular management fee will be shelling out £147 every year on average, according to the analysis by Moneyfacts.
The more expensive accounts charge a monthly fee of around £20.
But 39 out of 47 of these accounts pay no interest to customers who have a positive balance in their account.
This means they make money from customers in the black as they lend the cash they receive from deposits to borrowers in the form of personal loans, credit cards and mortgages.
These fees are even levied on those customers who pay between £1 and £19 a month for their current account.
Halifax’s Ultimate Reward Current Account, which charges a monthly fee of £15, charges £1 a day for overdrafts of between £300.01 and £1999.99.
It does provide a series of perks, including travel insurance, mobile insurance and breakdown cover with the AA.
Rachel Springall, finance expert at moneyfacts.co.uk, which carried out the research, said: ‘It’s clear to see why consumers should question whether they can acquire a ‘free’ bank account these days, with free banking becoming a bit of a myth. ‘The reason for this is that most current accounts charge fees for using their services, acquiring benefits, or when you look to borrow.’
Many providers have moved from charging interest to flat fees, which in most cases is much more expensive.
A file photo of people walk past a branch of Lloyds Bank
Ms Springall said: ‘Daily usage fees can be excessive and a nasty surprise as time passes, and what’s worse, most accounts now penalise you for dipping into an arranged limit.’
There are now only a few providers - M&S Bank, Metro Bank, Nationwide Building Society, Post Office Money and Tesco Bank - that offer an account without management or overdraft usage fees.
Instead, they charge interest for their overdrafts, which can be much more cost-effective.
City watchdog the Financial Conduct Authority last week vowed to crack down on rip off overdraft fees.
It also threatened to ban fees for unarranged overdrafts which are incurred when customers breach their overdraft limit.
The pointed out these overdraft charges can be more expensive than payday loans.
The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline.
We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook.
Part of the Daily Mail, The Mail on Sunday & Metro Media Group
August 09, 2017
Sources:` Daily Mail
As the year comes to a close, we take a look back at some of the most memorable images, captured by service and Ministry of Defence civilian photographers.
Firefighter Chris Kendall performed CPR on heart attack victim, but was later told he had passed away. However after five months he received a thank you text from the man he had saved, Allan Hainey.
An article on July 8, based on information provided by the Campaign against Anti-Semitism, reported that Islamic preacher Shaykh Ebrahim Bham had ‘compared Jews to fleas’.
At first glance these snaps show your everyday homes and streets. But these in fact reveal the present day sites of some of the most horrific crimes to have been committed in British history.
The concerning figures from 23 of England and Wales' 43 police forces show that 337 attacks were reported between April 2016 and March 2017.
The 53-year-old Foreign Secretary could be seen standing in front of a Fox Rent A Car kiosk at Turin airport in northern Italy.
Jessie, a four-year-old cat, was attacked and killed by the dogs right outside her owners' home at Mount, West Yorkshire. The dog walker then scooped her up with a spade and dumped her in a field.