first direct - £10/month for having a bank account..

[5lab]

http://news.bbc.co.uk/1/hi/business/6148776.stm

what do you guys think??

personally, i think its bound to happen.. banks made a chunk of their past profits off charges, which are now being challenged more and more (to a point where they'll probably be abandoned). they have to claw some of this money back, and charging for a standard account seems a fairly sensible way - bare in mind, this is *only* for folk who have a bank account (nothing else) with less than £1500 in, that pay in less than £1500 per month.. lets take an account with £200 in.. the interest (bank of england rates) is 5%, of which they have to pay the holder, say, 3%. that means the bank is getting £4 per year from your account.. that's really not much, for having to maintain, send you statements, organise your money, provide you plastic, put systems in to protect from fraud, etc.. its bound to happen..

i'm with hsbc and they're pushing their bank account plus (or something) really hard these days.. i recon it wont be long before some other banks follow - if they make no money off current accounts, why not single out the customers who have *only* them, and charge them?

i suspect there will always be some free accounts for pensioners etc who can't forfill the requirements.. maybe interest-free, or something, but in the business world there arent.. you want banking, you pay for it..

what are your thoughts??

[MadduckUK]

mm.. is this as big of a deal as ppl think? i mean, when Halifax say about getting some fantastic rate with them you need to pay in XXX a month to qualify.... and first direct is basically HSBC "for people that want to be in a club"?

[johnny02004976]

this is going to kill off First Direct once and for all - there are many other bank accounts out there which will do this free of charge.

When you mentioned that the BoE base rate is at 5%, trust me banks get a better interest rate than that depending on what they invest your money in.(take my word on this one i work for a bank ) Even on a small return investment say in government bonds or gold they'll still get better than the BoE base rate, or even better, banks who offer mortgages invest the money back in themselves and make an absolute killing. There's no need for a charge on a bank account unless they offer you something other bank dont.

[Clunk]

my barclays additions account has gone up from £4 a month to £6.50 and when i signed up for it, i was told that i needed to pay that fee because of the overdraft, but it turns out that i was mis-sold it so im going to get the fees back hopefully. Im not sure that they can close my account because it's not me that isnt agreeing to their terms and conditions in this case. The swines.

[herulach]

my barclays additions account has gone up from £4 a month to £6.50 and when i signed up for it, i was told that i needed to pay that fee because of the overdraft, but it turns out that i was mis-sold it so im going to get the fees back hopefully. Im not sure that they can close my account because it's not me that isnt agreeing to their terms and conditions in this case. The swines.

Is it a student/graduate additions account? If so you can only get facilities over 1500£ to a max of £3k if you pay the fee, so depending what your overdraft is you may not have been.

this is going to kill off First Direct once and for all - there are many other bank accounts out there which will do this free of charge.

you get what you pay for though, i can name anynumber of banks that charge management fees for personal accounts, and do very well out of it, particularly in the HNW sector.

Even on a small return investment say in government bonds or gold they'll still get better than the BoE base rate, or even better, banks who offer mortgages invest the money back in themselves and make an absolute killing.

Seconded, hence the massive push for compliance with BASEL 2 regs, to get teh amount of deposits held against contingencies down.

There's no need for a charge on a bank account unless they offer you something other bank dont.

This seems to be something theyre doing to get dormant customers out the door and off the books, rather to make any serious mount of money.

On a more varied and ranty note, on a wordwide scale, its not actually that common not to pay annual charges on accounts, and certainly not on credit cards. I personally bank where i work, with the usual fee being around £500-1000 p.a. depending on how much management time you take up and how much money you have. For that you get the complete service though, and a staff/customer ratio of about 1/20, like anything, you get what you pay for.

[MadduckUK]

I personally bank where i work, with the usual fee being around £500-1000 p.a. depending on how much management time you take up and how much money you have. For that you get the complete service though, and a staff/customer ratio of about 1/20, like anything, you get what you pay for.

oh what the hell, thats not what were talking about at all

[herulach]

oh what the hell, thats not what were talking about at all

I was under the impression the thread was about current account charges. Im merly pointing out that a tenner a month is not that much to pay. Admittedly with first direct you arent going to be paying for the face to face service, but as i pointed out, the purpose is to get rid of low return accounts, which it will do pretty well.

[MadduckUK]

Im merly pointing out that a tenner a month is not that much to pay.

and neither is £50,000 for a car once you've looked at a veyron

[5lab]

thing is, how many of us would actually struggle to have a savings acount/credit card/insurance/loan with the same folk we do our banking with? sure, you maybe don't get the absolute best rate that way, but i've currently got 3 accounts (very soon to be 4), all with hsbc. i'm aware i could get a better deal spreading around, but i'm basically lazy, so i wont..

there's lots of rumbling about this, but i'm honestly not sure if it will have much of an impact. the vast majority of customers voicing an opinion will be the vast majority of those who leave.. if you're not that fussed/impacted, you'll probably stay..

[TheAnimus]

i suspect there will always be some free accounts for pensioners etc who can't forfill the requirements.. maybe interest-free, or something, but in the business world there arent.. you want banking, you pay for it..

what are your thoughts??

no.

Just no. If a bank was earning the basic 5%, then they deserve to loose money.

12 statements. Hardly much cost there, the VISA debit infrastructure must use more than pays for itself in shop fees.

The bank i work for is one of europes largest, i work for the securities side of things, rather than the commercail bank and we make so much more money. Far more money than they could ever hope to get from personal account customers, way more, we're talking millions more, every account holder would have to pay thousands a year to just start to get even more.

The base rate is higher than its ever been, so banks can make more money, but some say the higher rate is to do with the higher risk, however current account holders shouldn't subside loss in credit, but think of it this way, the banks where hardly loosing money some 8 years ago where they?

[coco]

having to pay a bank so they can borrow your money ?
i don't think so,
if my banks try this i will be moving my accounts to those that won't charge

[MadduckUK]

but your money is HEAVY.. you don't expect us to hold it for free do you?

[Funkstar]

but your money is HEAVY.. you don't expect us to hold it for free do you?

I now have visions of millions of old london bankers in bowler hats standing about holding piles of cash

thank you!

[uchiha_itachi]

What I don't understand, is that as Firstdirect have no physical branch, and the fact that they run purely over the phone and internet, surely their overheads must be cheaper than other banks? I understand that they are linked to HSBC, and that you can conduct your account transactions and dealings in an HSBC bank, but FirstDirect don't have any branches. Automatically thats a good saving in rent/lease costs of buildings along with other costs which go hand in hand with building requirements.

Surely they are just screwing the customer out of money now with this new charge?

[Clunk]

Is it a student/graduate additions account? If so you can only get facilities over 1500£ to a max of £3k if you pay the fee, so depending what your overdraft is you may not have been.

No mate, I was on a standard current account and i rang up to arrange an overdraft of only 500 quid originally and they told me that it would be cheaper for me to get the additions because the first £100 is interest free, or words to that effect. It turns out that Im actually paying more now, because i still pay the interest on the overdraft and the 6.50 as well.

[5lab]

Surely they are just screwing the customer out of money now with this new charge?

my understanding is they're just trying to get rid of dormant/carp customers. to their mind, you're only a decent customer if you have high throughput, high amount, or some other service.. they said only 10% (or something) of customers would be affected, and i recon they might be right (just due to other products)