The myth of free banking and the financial inclusion conundrum

Research released today by Which? details the extent of charges on ostensibly ‘free’ current accounts. This might actually be music to the ears of the bankers – many within the banking industry would prefer to charge up-front for services like bank accounts. Either way, ordinary customers lose out.

Customers are currently being charged hefty fees in a range of circumstances. According to Which? charges for going overdrawn, without prior approval, range from £120 to £900 per year. But even customers with authorised overdrafts will be charged for being overdrawn at an APR of 19.9%, which is higher than many credit cards and personal loans.

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Image: Tim Peters

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