End of free banking

arunadasi

A bit of stuff you might find interesting.
I lived in Germany for many years, and banks run a bit differently there. There is no free banking. The BACS system is the default, ie everything is paid by bank transfer. If someone sends you a bill, they also send their account details and most often a little form already filled in, which you post in your own bank. Cheques are virtually non-existant, so nothing getting lost in the post.

Online banking is free, if you agree to print out your own statements. They don't have those extortionate charges for going over the limit.

The best thing, though, is how quick everything is. I regularly transfer money from my bank in Germany to my bank in England; I do it online using the SWIFT code. The money leaves my German bank one day, and is on my English bank 9 am the very next day.

Here it takes at least two days for a BACS transfer to go through, unless it's the same bank. I call this unagreed borrowing. It's a bit hypocritical for a bank to charge me £35 for going £2 over the limit, yet hold on to £1000 of mine; earning interest on it, for two days just because they can.

CDes

Isn't this what Faster Payments was set up to fix?

ShelfStacker_3

arunadasi wrote: »

It's a bit hypocritical for a bank to charge me £35 for going £2 over the limit, yet hold on to £1000 of mine; earning interest on it, for two days just because they can.

Just a quick note: no, banks don't earn interest on BACS transfers which have yet to be credited. No, it's not "just because they can". As far as I'm aware, money sent via BACS and not yet credited to the recipient account is in limbo and earns no interest for anyone.

YorkshireBoy

ShelfStacker wrote: »

As far as I'm aware, money sent via BACS and not yet credited to the recipient account is in limbo and earns no interest for anyone.

They do collectively, earn "float interest"...

http://www.oft.gov.uk/news/press/2005/94-05 (note 3, 4th bullet).

halight

I have to say that i dont mind paying for banking.

But the folks that dont have a lot of money and only wont a basic accout. I feel that thay should not be chearged as £5 could be a lot to them. Maybe it would be better for these not to get intrest on there account.

DCFC79

I wouldn't mind paying a flat fee for banking, but im happy with banking as it is at the moment

arunadasi

CDes wrote: »

Isn't this what Faster Payments was set up to fix?

What are Faster Payments? Never heard of this. Are you saying that it no longer takes three days?

gt94sss2

arunadasi wrote: »

What are Faster Payments? Never heard of this. Are you saying that it no longer takes three days?

The Faster Payments Service was launched at the end of May 2008 - it means that most transfers between participating banks happen within a couple of hours at most.

Some details at:

http://www.apacs.org.uk/payments_industry/faster_payments_service.html
http://www.apacs.org.uk/08_12_18.htm

Its effectively a replacement for a lot of BACS and smaller value CHAPS payments - though both those systems still continue.. - and not all banks have yet fully rolled it out. However, around two-thirds of phone and internet payments are now processed through the Faster Payments Service.

Regards
Sunil

arunadasi

gt94sss2 wrote: »

The Faster Payments Service was launched at the end of May 2008

Its effectively a replacement for a lot of BACS and smaller value CHAPS payments - though both those systems still continue.. - and not all banks have yet fully rolled it out. However, around two-thirds of phone and internet payments are now processed through the Faster Payments Service.

Regards
Sunil

Good to know; thanks

gt94sss2

ShelfStacker wrote: »

As far as I'm aware, money sent via BACS and not yet credited to the recipient account is in limbo and earns no interest for anyone.

As YorkshireBoy states 'float interest' does exist but a couple of banks - including HSBC - continue to pay interest (if relevant) on any sums their customers send via BACS until the recipient receives it..

Regards
Sunil