Time to end free banking? Poll help needed

Thrugelmir

rmg1 wrote: »

My money is used by the banks (without my express permission) to make themselves money. It's given to people with overdrafts (don't have one), loans (have 2 of those :eek:) and is also used to invest in the stock market.

But you expect to have access to banking services for free. Be provided with a cheque book and cheque card. Have use of ATM's to obtain cash. Walk into a branch and deposit cash and cheques over the counter.

Goes the small amount of money you have in your current account pay for the above?

The UK is very unique in having "free services". Given the falling returns made from retail banking these day. The era of totally free banking appear to be over.

pqrdef

So how does this work?

"We charge £5 a month for this account. But hey, if you pay in £1000 in a month, we'll give you £5 reward!"

"We charge £10 a month for this account. But you can add on this package of insurances, with a free overdraft and your account fees bundled in, all for just £10!"

Seems to me the banks want to pay me to bank with them, so how come they also want to charge me?

The banks have their own agenda here. And it's not about reducing overdraft charges or not mis-selling insurance.

andy_allblack

missprice wrote: »

I don't care if the banks charge fees
so long as I can go back to being paid in cash every week:p

Yes I realise thats never going to happen.
as for banks providing branches and ATMs and phone banking costing money, well they been doing that for years and they still made vast profits until the crash

Cash wages is the way to go:T

Totally agree, when "free" banking was introduced in the eighties, pensions weren't paid into bank accounts, I believe a large percentage of people still had wage packets. If a monthly fee is imposed on every customer, that means customers on low wages, will have a fixed fee deducted from their wages straight away. Bring back fees if they want too, but let's have a choice of being paid in cash.

antrobus

DrSyn wrote: »

What do you mean "make it cheap for tax payers"? Why would it cost the taxpayer anything?

antrobus

Girobank was originally formed by the goverment as a bank just for the post office workers, then it was offered to the general public as a bank.

No, National Giro was launched on 18 October 1968 as the 'people's bank'. I'm not aware that there was any time when it was available only to 'post office workers'.

DrSyn wrote: »

....If the goverment were to reinvent GIROBANK, the money to set it up and run it to begin with, can only come from the tax payers. It of course would offer a source of money to the goverment, as does NS&I.

NS&I? You mean the old Post Office Savings Bank?:)

DrSyn wrote: »

..The same way so called "free banking" does to the Big Banks.

The problem is that National Giro aka Girobank never made any money out of personal banking. Girobank consistently made losses until it moved into commercial banking and cash handling. The first thing that A&L did when they bought Girobank was to move all the personal banking into the building society leaving Girobank to become A&L Commercial Banking.

Or to put it another way; Girobank was a failure. Which is why you find scholarly articles with titles such as "The business of Britain's National Giro, 1968-78: “Socialist euphoria and self-deception?"

Generally speaking it's a good idea not to repeat the mistakes of the past.

antrobus

rmg1 wrote: »

...My money is used by the banks (without my express permission) to make themselves money. ....)

I think you'll find that you did give them your 'express permission'. It'll be in that contract you signed when you opened the account.:)

antrobus

andy_allblack wrote: »

...If a monthly fee is imposed on every customer, that means customers on low wages, will have a fixed fee deducted from their wages straight away.

You mean just like the current account offered by credit unions imposes charges on its customers?

andy_allblack wrote: »

...
Bring back fees if they want too, but let's have a choice of being paid in cash.

You can have the choice of being paid in cash as long as you're prepared to pay for it. Or do you think that all those wages clerks who will be needed to stuff the folding stuff into brown paper envelopes will work for free? Not to mention the security guards and so forth.

antrobus

dzug1 wrote: »

But when Girobank started it wasn't free - ISTR a charge per cheque. Can't remember whether you bought a book of them or paid as you went along. Didn't last that long though

That is correct. When Girobank was launched in 1968 as National Giro it charged on a per transaction basis. Free banking didn't come in until 1974 I believe.

antrobus

Thrugelmir wrote: »

....The UK is very unique in having "free services". Given the falling returns made from retail banking these day. The era of totally free banking appear to be over.

The UK free banking model arose as a result of the Building Societies Act 1986 which allowed building societies to offer current accounts. As a result both Abbey National and Nationwide launched current accounts that offered 'free banking when in credit', and both were so succesful in winning business that by 1989 all the major banks had caved in and were offering similar products.

Or, as some might put it, we have Margaret Thatcher to thank for free banking in the UK.

Stompa

antrobus wrote: »

The UK free banking model arose as a result of the Building Societies Act 1986 which allowed building societies to offer current accounts. As a result both Abbey National and Nationwide launched current accounts that offered 'free banking when in credit', and both were so succesful in winning business that by 1989 all the major banks had caved in and were offering similar products.

But there was free banking prior to 1986 surely? I must have opened my first current account (with Barclays) in 1974, and unless I'm misremembering (it is a long time ago!) I don't think I've ever been charged since then.

pvt

I'm in favour of the status quo. Which is leaving it to market forces.

As far as I am aware, banks are pretty much at liberty to structure the product they provide as they please. And it seems to work just fine to me. I can't imagine anything worse than the government interferring with that and telling banks they have to charge those who bank in credit more, and those who bank in debt less.

It's normally the case, where there is healthy competition, that providers who offer a poor deal will lose customers to providers who offer a better one.