Bankers

[NickWelford]

I believe they did say that the charge would be waived if either £1500 was deposited each month, OR a balance of £1500 was maintained.

It is true that in most countries you pay for a current account, but you generally get a better service and more interest on the balance. Customers maintaining a small credit balance are costly. The current 'free' account holder pays the interest that the bank can get from their money on the money market. You get what you pay for........ if you expect it for free, then don't expect much. Banks are not a social service - they are out to get as much of your cash as they can. I worked for Barclaycard for 27 years - it's a sordid business, really.

 

[wrightclan]

It does seem an odd criteria though. You could have £100,000 in your current account but only deposit £1,000 a month and they would charge you and yet would make a healthy profit on the deposited money. Yet you could have almost nothing and pay in 1,500 a month that goes straight out again and you would get free banking.

Dedee is right in saying that the UK is somewhat unique in having free banking. I have US current account and that has a monthly charge but that gets waived if the average balance is above about $2,000. I suppose though that in reality that probably equates to a monthly charge of the interest on $2,000. but that might be a fairer way forward for FD.

Andrew

What U.S. bank are you with? :shock: There are plenty of U.S. banks that offer free cheque/current accounts. And most will offer free gifts as an incentive to open an account. (Mostly cheap toasters and such :roll: ) At least they did up until three years ago when I finally closed my U.S. account. I assume there are still many who do.

Brad

 

[RogerS]

Being Devil's advocate I'm slightly bemused why anyone would expect free banking. The banks are providing a service to you. You can pay bills electronically, write cheques, do a whole host of other things that you could not easily do if you didn't use the banking system. It costs them money to provide the infrastructure that allows you to do this and so why should we not be expected to pay for this?

Leaving money in our current account provides a mechanism for the banks to offset those costs.

But they make huge profits, I hear you say. So what? That profit is made from many, many sources and not necessarily from personal banking and so therefore surely that argument is moot unless you're advocating the redistribution of wealth...but then that's another topic entirely

 

[wrightclan]

Being Devil's advocate I'm slightly bemused why anyone would expect free banking. The banks are providing a service to you. You can pay bills electronically, write cheques, do a whole host of other things that you could not easily do if you didn't use the banking system. It costs them money to provide the infrastructure that allows you to do this and so why should we not be expected to pay for this?

Leaving money in our current account provides a mechanism for the banks to offset those costs.

But they make huge profits, I hear you say. So what? That profit is made from many, many sources and not necessarily from personal banking and so therefore surely that argument is moot unless you're advocating the redistribution of wealth...but then that's another topic entirely

You're absolutely right--there's no such thing as a free lunch. But "Free Banking" isn't really free is it? I mean they are making money by investing the money we deposit. Ok, they may not make much with the money I deposit, but multiply me by hundreds of thousands, and they have quite a large pool to invest.

I guess the onerous thing here is that they view someone who deposits £1,499.99 every month as having a "dormant account."

Brad

 

[RogerS]

I guess the onerous thing here is that they view someone who deposits £1,499.99 every month as having a "dormant account."

Brad

But where did the word "dormant" come from? I looked on their site and FAQs and could not find this word. The only issue I'd take with them is their statement that they have 40,000 inactive customers and this caused them a 'significant expense'? 'scuse me? Just how?

Also reading the other ways to get out, seems to me the simplest way is to take out their credit card and not use it.

I wait with baited breath to see if NatWest start to charge since I was 'forced' to open an account with them so that I could manage my credit card with them online. The bank account has nil balance and nil transactions!

 

[wrightclan]

I guess the onerous thing here is that they view someone who deposits £1,499.99 every month as having a "dormant account."

Brad

But where did the word "dormant" come from? I looked on their site and FAQs and could not find this word. The only issue I'd take with them is their statement that they have 40,000 inactive customers and this caused them a 'significant expense'? 'scuse me? Just how?

Well I heard the word 'dormant' used several times on BBC radio throughout the day of the 'news.' :roll: Guess it just proves you can't believe everything you hear. Then again dormant/inactive--what's the difference?

Also reading the other ways to get out, seems to me the simplest way is to take out their credit card and not use it.

Or when you get paid, withdraw in £250-£350 increments (whatever the cash machine will allow you to withdraw)walk straight into the bank and redeposit it, every day until you have £1,500 for the month Not that any of us have time for that. :roll:

Brad

 

[mr]

But where did the word "dormant" come from?

From the first post in this thread I believe, and I also heard the term used on the radio2 news the evening before the story hit this forum. Dormant being the term used to describe accounts with less than £1500 throughput per month, hence my concern that those earning less than that are running dormant accounts and so charged. If the bank was going to charge for costs of running a dormant (in the correct sense of the word) account that would be a different matter, however it appears that they are chosing to classify the less wealthy as running dormant accounts.
Cheers Mike

 

[wrightclan]

... it appears that they are chosing to classify the less wealthy as running dormant accounts.
Cheers Mike

Or how about the self-employed (or partly self-employed) person who may put several thousand through in one month and less than £1,500 the next month?

Brad

 

[mr]

... it appears that they are chosing to classify the less wealthy as running dormant accounts.
Cheers Mike

Or how about the self-employed (or partly self-employed) person who may put several thousand through in one month and less than £1,500 the next month?

Brad

Exactly Brad, thats my own situation hence some of my concerns. I already pay the bank for various services I see no reason why I should pay additional amounts for the pleasure of doing business with them.
Mike

 

[Nick W]

There was a representative of the bank on Money Box (Radio4) today, who suggested that you open a savings account and put £1 into it to avoid the charges.

Wonder how long that loophole will last - perhaps they'll start charging both accounts for being dormant. :roll:

EDIT: Having enquired further it appears that you would need to put £1 a month into the savings account to stop it from going dormant. Maybe it's a government plot to make us save something for our retirement.