Are 'free' current accounts a thing of the past?

jimjames

JeffreyR wrote: »

On Thursday the Competition & Markets Authority will be publishing a report into current accounts that is expected to announce a number of measures to increase competitive in the sector. One of the measures that may be announced is a 'flat fee' for all current accounts.
What do you all think? Would you be prepared to pay for a current account?

I get 3-5% on my current accounts. That's me being paid to hold it not me paying the bank. I do pay a monthly fee for one account that also pays me 3% but for that fee I get a range of insurance cover for myself and my family that is cheaper than buying separately. So I do pay but equally I get paid for holding an account.

When I see a post here with someone paying thousands in overdraft fees it gives an idea who is paying the cost of accounts but I don't see why I should pay the same cost as someone who can't manage their finances.

beefturnmail

with several current accounts from different providers offering as a loss leader high interest rates and perks\cashback etc. and the CASS making changing provider simple and hassle free, it's difficult to see how they could be made more competitive. It's savings accounts which aren't competitive!

GazHatesBanks

JeffreyR wrote: »

What do you all think? Would you be prepared to pay for a current account?

Only if they paid me the equivalent rate to borrow my money as they would charge if I borrowed theirs.


At the moment I am happy to not receive any interest in exchange for them not charging me for day to day transactions (and I don't need their overpriced add-ons such as travel insurance or phone insurance either).

jimjames

beefturnmail wrote: »

with several current accounts from different providers offering as a loss leader high interest rates and perks\cashback etc. and the CASS making changing provider simple and hassle free, it's difficult to see how they could be made more competitive. It's savings accounts which aren't competitive!

Exactly. Just because some people are lazy/lethargic and don't want the bother of moving accounts doesn't mean that there isn't competition. Same for the gas/electricity industry, plenty of options to save £200+ per year by switching but many still don't bother.

jimjames

GazHatesBanks wrote: »

At the moment I am happy to not receive any interest in exchange for them not charging me for day to day transactions (and I don't need their overpriced add-ons such as travel insurance or phone insurance either).

Thing is you can receive interest and not pay a fee so I wouldn't consider not being paid interest as a fair exchange.

puk999

I wouldn't want to explicitly pay a fee for my current account. If there was a mandatory flat fee, there'd be bank(s) who would charge the fee and then immediately refund it. I'd move my banking there (assuming interest paid on deposits was the same).

Former_MSE_Andrea

We'll be writing about this. Keep an eye on MSE News.

Gouldy

I wouldn't want to pay for a current account!

Indout96

jimjames wrote: »

Thing is you can receive interest and not pay a fee so I wouldn't consider not being paid interest as a fair exchange.

But it would have other restrictions, my cash card lets me draw £1000 a day from cash machines, whilst I normally only use it once a month its worth it for me to not get interest but not get charged.
I did look at 1 account that would pay me interest but their daily limit was £300.

colsten

Indout96 wrote: »

But it would have other restrictions, my cash card lets me draw £1000 a day from cash machines, whilst I normally only use it once a month its worth it for me to not get interest but not get charged.
I did look at 1 account that would pay me interest but their daily limit was £300.

I get paid 4% interest and I can withdraw £2,000 per day without previous advice in any of hundreds of Branches throughout the UK. If I want more, I just ring my Branch 24 hours ahead so they can make sure they have enough cash in.

That's just my Club Lloyds account.

I also have 3% and 5% current accounts, from which I can withdraw similar amounts each day.