Friday, May 25, 2012

Is this the end of free banking? Watchdog calls for radical shake-up with a monthly fee for ALL accounts (of up to £15 per month)

Bank customers should be charged a monthly fee on current accounts even if they are in credit, according to a finance industry watchdog.

Charges of £15 a month could be applied, allowing a fixed number of cash machine withdrawals, direct debits, standing orders and cheques. Any transactions beyond these caps would attract extra charges.

The idea comes from Andrew Bailey, executive director of the Bank of England and the chief executive-elect of the Government's Prudential Regulatory Authority, set up to police the banks.

He said up-front fees should form part of a radical shake-up of the current system in which the 'myth' of free banking is perpetuated.

He suggested that the fees would replace a regime of back-door charges which banks use to make money from ordinary customers. Read More