/ Money

Charging to use a current account? It’s not for me

Chequebook and bank card

The introduction of current account charges has been suggested as the remedy to a variety of financial ills over the years. Most recently, it’s been proposed to tackle banking transparency – but is this the solution?

Now, the first thing to remember is that banking is not free in this country – contrary to what’s commonly believed. UK banking customers can pay up to £2,197 per year to their banks in the form of charges arising from overdrafts and bounced payments.

As a result, it’s estimated that the banks rake in nearly £9bn in charges and forgone interest on our current accounts. So any extra charges could be on top of the considerable amount the banks already receive from their customers.

Charging all bank account users

It’s recently been suggested that there could be a charge on all current accounts – regardless of debit, credit or additional features, to increase bank charges transparency. This is because the existing charges operating on most current accounts are confusing to customers, who often feel these charges to be ‘hidden’ in the small print. Supporters argue that a flat, upfront charge would allow customers to compare different accounts and switch more easily.

However, while there’s a clear need for transparency around charging, there’s no guarantee that an upfront charge would bring this about. Would current account charges see the end of the banks’ myriad of complicated overdraft charges? Or make them pay more interest on current accounts? It seems unlikely.

Meanwhile, what about those who never use their overdraft – is it right to make these customers contribute fees to cover costs created by those who do?

Banking charges add to the squeeze

Finally, there are vulnerable, low-income customers, such as those surviving on the state pension, who may already find it difficult to take part in traditional financial activity. Do we really want to create yet another barrier between these customers and the mainstream of financial service provision at a time when we should be thinking about ways to reduce the numbers of the ‘unbanked’?

If banks want to be more transparent, they could offer downloadable electronic information about how you use your account. This would enable comparison sites to be developed so that customers can be clear about how much they currently pay and whether there’s a better deal available elsewhere.

So what do you think? Do you buy the argument that an upfront fee would create more transparency? Or would it just be business as usual with a charge on top?

Should you pay for a standard current account?

No (81%, 1,458 Votes)

They're not free anyway (16%, 284 Votes)

Yes (3%, 63 Votes)

Total Voters: 1,805

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I think we need to start by discussing the interest rates that banks would pay on money held in current accounts if they want to charge us for using these accounts.

The best way to encourage customers to switch would be to offer a trial period and the opportunity to switch back to a ‘free’ account.

ND says:
5 March 2014

Firstly why should we pay banks anything??? We’ve already bailed them out whilst they rake in profits – utterly outrageous and an outright scandal. Secondly why should we have to pay money to them to make them be transparent about charges, why on earth is one thing linked to the other??? Transparency about charges should be the law, not something we have to pay for. Thirdly it would just be an additional money spinner for them and even if they brought down current charges as an excuse for spreading costs across customers, without doubt a few years down the line that would be forgotten and once people were used to paying for banking as standard, they’d hike up the current style charges again and we’d be worse off than before. The banks owe us massively, they should be paying out bonuses to each and every tax paying citizen not contemplating taking even more money from us – utterly scandalous!!!!!


This is typical of the ‘nanny state’ attitude that people have nowadays. Bank charges are perfectly transparent if you can be bothered to read the small print, although the PPI affair was definitely wrong, and illegal, and should never have happened. Everyone who goes into overdraft, or has a cheque bounced, has done it voluntarily or through being irresponsible and not monitoring their account sufficiently. It is about time people grew up and stopped whining all the time, and started putting some effort into working out what is best for them – after all, we all went to school, didn’t we? We should be able to work out percentages, or discounts or whatever. The banking crisis happened not just because the banks supplied money too easily, but because people took out credit irresponsibly, and then whined that it was someone else’s fault. Phooey!


Much of what you say is true; But equally true is that there is far too much small print (or gabble on radio, or unread reams in pop-up windows online), often in convoluted legalese that everyone knows nobody really reads let alone comprehends.

A cure might be that all print must be of the same font size, and that the seller must read all of it to the purchaser in full and check at the end with random questions, that the purchaser has understood everything. If nothing else, that would reduce the amount of small print, and force it to concentrate on a few paragraphs that really mattered, written in crystal clear transparent English.


I really agree with your point about “convoluted legalese”.

These people are paid a fortune to produce this rubbish. It is about time that the legal profession realised they are supposed to be a caring profession whose purpose is to help us all get along with each other.

They should not be a profession whose purpose is to shaft us for as much money (+VAT) that they can groom us into agreeing to pay.

The failure of society to give value for money instead of trying to trick people out of it for no value is what is giving rise to all the economic problems of our present time. Money isn’t representing value, instead it represents a gaming point that you can twist out of other people. A few days ago the top three items on the TV news were all about vast sums of money changing hands because of legal actions. These actions had nothing to do with value being exchanged for the money. It is hardly surprising that there are financial failures and riot and rebellion all over the world.

Have a “look inside the book” called “The Selfish Gene” on Amazon and search for “lets kill all the lawyers”. This is a solution suggested by a rebellious character in Shakespeare, and the author (Richard Dawkins) goes on the explain why the profession still makes people think along these lines.

We need a legal profession, but we do not need the way it has become. The phrase is in Chapter 12 “Nice Guys Finish First”, and in the printed edition I have it appears on page 221.

Mike Suttill says:
8 March 2014

I totally agree that people should take more personal responsibility for their actions – especially financially. Which seems to be endorsing more and more “the Government should do something” issues rather than pointing out how people can do things for themselves. Terms and conditions are always available for current accounts, credit cards and other financial instruments and should be read and understood before people take them up. Free advice is available to those who might be termed vulnerable. As for Banks charging for using current accounts – those of us who do not incur charges should not be asked to pay for a service that the banks provide in order to use our money whilst on deposit.


John, I dislike the amount of money made by the legal profession, and the ease with which our public bodies pay them, using our money, for protection. However, as I see it, it is politicians who cause laws to be written and enacted, not the lawers; their job is to interpret the law as it is written to help their client. If you are accused of breaking a law you would want your lawyer to do everything possible to get you off – the prosecution will do the reverse. Including unravelling convoluted law and exploiting loopholes. Blame the politicians – but it is not an easy job to write rules that are totally watertight and mean exactly what you want. Bit like the terms and conditions of your bank account (just to try and keep this on topic!).


How many people with a financial or employment interest in banks are allowed to be MPs? How many pharmaceutical manufacturers, arms makers etc?

Now how many solicitors, barristers, accountants etc are MPs?


A current account costs a bank money to operate – dealing with incoming and outgoing trasactions, standing orders, direct debits, issuing cheque books, sending out statements. So if you only have a current account, who is going to pay for these costs? Do we expect other customers, with overdrafts (authorised or not), who incur other charges to subsidise us? I don’t think so. My current account is “free” of charge, although no doubt the building society (in my case) makes a little bit of interest on the balance I leave there. I don’t begrudge them that – I get a good service. I would be happy if all customers paid for the service they received, set against interest earned on any credit balance.

ND says:
5 March 2014

Malcolm: do you really think the bank doesn’t make a profit and gives free banking for the love of it?? Don’t kid yourself, banks make tons of money off the interest on the money we give them, they make HUGE profits!!! And also have you forgotten the gigantic bailout we gave them for their reckless actions that wrecked the economy whilst they handed out insane bonuses on top of already incredibly high wages!!??


ND, as I said, money is made on the deposit in your current account. However, if you operate that prudently – keeping most of your funds on deposit (earning interest) and transfer what you need when it is needed – then that money made will be small. If you do this you get very good value from a current account.
I don’t kid myself, nor have I overlooked the bailout. Don’t confuse the investment banking problems with other banking. This conversation is about current accounts, not how we obtain service for free as retribution for misdemeanours

willowe says:
6 March 2014

I completely agree Malcolm.r . Like you I keep my current account balance at a sensible level and don’t begrudge the bank their interest on that as long as they continue to provide me with a good service. Hopefully that interest pays them for providing my account and who knows I might find one of their other accounts relevant to me some day, and they might actually “cross-sell” me something else.


Right-on, mate! Everyone expects something for nothing these days. If you keep your account properly managed, the bank will supply you with facilities, and earn some interest on what is in credit. If you search around, you can find banks which will give interest over certain amounts in credit.

Mary says:
5 March 2014

For several decades when wages were stopped being paid in cash, banks have encouraged the use of current accounts. Monies deposited and then used over the month e.g. salary, is then available to banks enabling them to gather interest on these funds.

Direct debit payments were also encouraged with the closure of offices that originally accepted payments. e.g utilities. Some of you may not know that electricity and gas used to be paid for at actual showrooms. Most companies now expect direct debits to be used for credit payments, If you suggested you go into the shops/showrooms to make monthly payments they would consider you to be a dinosaur. Also, phone, t.v., broadband providers cannot be paid any other way these days. Why? the banks have dictated that we use the direct debit system instead of going into branches to make these payments. So why should we pay them for a system the banks have created and from which they make profit when our money sits in their systems.