Don’t Bank On It.

The Bank of England reduced their interest rates to an all time low of 0.25% recently, and we have been waiting to see what impact this will have on us as Bank Account Holders.
Two weeks ago, we received a letter from our bank informing us of changes to the terms and conditions of some current accounts, and we responded by asking them to leave our account as it was. We pay in, we have cards to draw out or pay for our shopping, a cheque book, a couple of regular bill payments and a small overdraft facility, which we’ve never used. Perfect. Leave it alone!
bankIn my banking days, bank charges were applied for each cheque you wrote, for writing cheques not covered by sufficient funds (bouncing) or unofficial overdrafts.
Businesses were charged for the number of cheques they paid in, and had a different scale of charges for the rest.
Stopped cheques (loss, theft of a cheque book or dispute with the payee) were free of charges, but if you had used your cheque guarantee card for the latter, tough luck.
Pretty pictures of animals or country scenes were also available on your cheques for an additional fee.
Of course these were only pence charges, not the pounds banks charge today.

Free banking for private individuals was introduced over 30 years ago (source).
I remember initially accounts had to maintain a balance of £100, then only £50 in competition to attract new customers. Eventually, provided your account stayed in credit, every bank adopted the same policy and made no charges at all, unless you wanted a bank transfer made the same day or pay money abroad.

Times are changing, and the days of free banking are rumoured as being numbered.

Already, savers have been hit with reductions to a pittance in interest though better rates are available if you are able to tie up your money for a set period. For people like us, instant access is probably the norm,  so we are on the lowest rates.
interestHowever, some banks are now about to introduce Negative Interest, where the depositor is charged for having money in their account (source).
OK, the plan is for this to be applied to large depositors only, but like everything else, Joe Public is more than likely to be included eventually.

Most people have to have a bank account. It is a place for wages, benefits, pensions, annuities and the like to be paid into.
It is a handy way to pay bills by direct debit, standing order, bank transfer, or by writing a cheque, although many establishments no longer accept cheques in payment, especially since the abolition of the Cheque Guarantee Card in 2011 (source).

If banks were to suddenly introduce charges to all account holders, there is more than likely to be a run on the banks concerned as people withdraw their money in droves.
Cash machines would dry up as customers took the maximum withdrawal already in place, and maximum cashback transaction facilities available through a variety of stores would rocket.
Most banks are unprepared for large withdrawals without notice, so in just a few hours, branch cash reserves would be depleted, and they would have to close their doors.

TPTB may have considered having a cashless society some years back, but can you imagine a Bankless one?
And what happens to your money that you can’t take out?


About pensitivity101

I am a retired number cruncher with a vivid imagination and wacky sense of humour which extends to short stories and poetry. I love to cook and am a bit of a dog whisperer as I get on better with them than people sometimes! In November 2020, we lost our beloved Maggie who adopted us as a 7 week old pup in March 2005. We decided to have a photo put on canvas as we had for her predecessor Barney. We now have three pictures of our fur babies on the wall as we found a snapshot of Kizzy, my GSD when Hubby and I first met so had hers done too. On February 24th 2022 we were blessed to find Maya, a 13 week old GSD pup who has made her own place in our hearts. You can follow our training methods, photos and her growth in my blog posts. From 2014 to 2017 'Home' was a 41 foot narrow boat where we made strong friendships both on and off the water. We were close to nature enjoying swan and duck families for neighbours, and it was a fascinating chapter in our lives. We now reside in a small bungalow on the Lincolnshire coast where we have forged new friendships and interests.
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10 Responses to Don’t Bank On It.

  1. foguth says:

    IMHO, banks are in business for one reason: profit. Ditto for insurance companies. While I must deal with both, they annoy me. IF our bank dares to impose negative interest, I shall close my accounts and put everything in the credit union… and pray they don’t follow the banks’ example.

    • I wouldn’t blame you. We would close our accounts, but not sure where we’d go for an alternative.

      • foguth says:

        When we lived overseas, some people used internet banks, but I don’t recall the names. Apparently, they have less overhead (less real estate, etc) and different laws. You might want to ask if anyone you know uses them.

      • Internet banking is very popular over here, and we know several people who use it. We are not keen though due to the problems with hacking and fraudulent access. Our bank actually has one of the worst records!

      • foguth says:

        Good luck sorting out this problem. IF a bank is solely on the internet, I would think its cyber security would be stronger than an institution that divided its attention between cyber and brick/mortar.

  2. janegundogan says:

    In Australia the banks are actively bringing in a service charge if you need to deal with a banker. I went into a bank recently back in Oz and was surprised to see there were no tellers. There was a desk, a laptop on the desk and a phone. There was a Customer Service member available but they suggested (on two separate occasions) that I use either their computer to complete my transaction or use the card machine.

    In Turkey there is a banker for every single item you do. Cards. Banker. Withdrawal. Banker. Signing something. Banker. Cup of tea. Banker. I cant imagine them every catching up when I have difficulty trying to get my internet banking set up!

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