Free banking? There is no such thing, says Tyrie

It's about time this endless Bank Bashing was put to rest. Free banking is available to anyone who takes the trouble to organise their finance and it's paid for by those who don't.

Why anyone thinks they should not pay dearly for an "unauthorised overdraft" is beyond me, after all it's very close to theft! (I'll just take your wallet from your pocket, spend the money and return it when I feel like it, ok?)......get real!

The banks do not have to allow any unauthorised overdrafts. They continue to permit such borrowings because it is highly profitable.

With you all the way Anonymous 1.

If these disorganised, lazy morons give the banks a chance to make money out of them they can't really complain when it happens.

The stand point of PERSONAL RESPONSIBILITY needs to be drummed in to those who insist on spending more money than they earn.

As someone who is careful to never go overdrawn and never gets any bank charges I am quite happy for the bank to not take interest on my account and take a few days to clear cheques. I have access to almost every cashpoint in the country free of charge, a walk in service at any of the banks branches, telephone banking and online banking free of charge and I can pay for everything with a card provided by my bank, though I nearly always use a credit card for buying things. It would be ridiculous to think I could have access to all this without them making any money.

Well... when banks get in trouble they get bailed out with government money which they then use to pay bonuses. So they get little sympathy on this from me.

It all depends where you draw the system boundary. Banking is free for me (apart from the loss of interest on current account - which I minimise). Banking as a whole can not be free - unless all the bank staff and supporting IT etc etc would like to work and supply for nothing.

Ditto the NHS - it is not free. Nurses, doctors, administrators etc exchange their labour for money to keep themselves solvent. (Many also have a calling - hence prepared to work for lower return)

Why do we have this nonsensical obsession with things being free - except for fresh air - and sometimes that costs.

I get free banking, and even better than that my bank (Halifax) pays me £5 per month!

For this I can make as many deposits and withdrawals as I wish, and the bank pays all my bills on time via direct debits or standing orders.

I get a statement of all transactions through the post every month

I have a direct debit arrangement that pays off my bank credit card on time every month so I don’t incur charges or interest – in fact I get cash-back!

In return for this free banking I have my salary paid into the account.

When one thinks of all the administrative costs associated with handling current accounts, particularly when there is much activity, then I feel very happy that I do not have to pay. In return, I have no issue in Halifax using my money as they wish – my funds are of course always available should I wish to make a withdrawal.

On a final note, the Halifax sent me a letter in error advising me that I was overdrawn and advising me that I would have to pay charges. I pointed out their error and they apologised and gave me £50 for the inconvenience!

Banks: Use short term deposits to fund long term loans. They get thier money from interest on said loans. If some poor soul's pay does not go in one day because of the accounts department of his employer, and he is brought into negativ balance the same day, should the bank levy a large charge on this client whoms deposit generates their money? Answer: NO

P M Sharman: Is air really fresh?

Anonymous 1: if an unauthorised overdraft is theft, then what is the minimum £1000 account balance that many banks stipulate, authorised theft? It seems to me that they are taking ownership of account holder's money and telling them not to use it.

The way I see it is that by opening bank accounts, we are LENDING THEM money to invest in financial markets (FOREX, etc), but in return get a less than wholesale interest rate for their high gains.

I agree that people shouldn't go into overdrafts and overspend. However, applying high charges only compounds the problem for those people. It's not always their fault. Perhaps through loosing their job or health, they are not able to maintain the income to which they were accustomed. The ones that are compulsive spenders and live beyond their means, going into overdrafts regularly, should perhaps be interviewed to find out the problem. The bank can them make an informed decision to revoke the facility.

I strongly believe that those short-term loan comapnies should be made illegal. Over 1000% APR, in my opinion, is a crime.

Lee S..........If your bank (or any other) stipulates minimum £1000 balance then change banks! I think you'll find that it's a minimum deposit of £1000/month............and for this you get free banking and £5/month from Halifax or 4% from Lloyds......

Banks have got themselves into this mess by offering free in credit banking in the 1980s. Lorna says moving back to a 'pay as you use' charging structure would annoy as many as it would placate. In reality it would annoy far more. 80% of current account customers pay no O/d charges, and many don't pay any o/d interest either.

Much is made of the money that banks make from current account deposits, all the data in Lorna's article relates to years where base rate was 5% plus. In today's 0.5% environment, banks can't use these deposits and stick them in Government securities (as they used to) to make a healthy profit to offset the costs of providing accounts and a branch network.

Watching programmes's like last night's panorama just makes my brain hurt, the UK's leading documentary series so spectacularly chose to go down tabloid rip off bank/scandal route and deliberately chose not to understand why Banks charge they way they do and the costs they incur.

In my opinion, banks will move over the next few years to a more simplistic charging structure, but will the majority of people prefer it? I doubt it.

Tut-tut.... Anon4.... are you suggesting that a Citywire journalist is using irrelevent data to write an article? whatever next, somebody may suggest they have a political agenda..........what? even after Tony's left?......*grin*

Given the second homes allowance restrictions and purse string contraction on MP's expenses in the past 24 months, the cynical might say it is clear to see where the impetus has come from.

It's a big bad world out there. To my knowledge banks are not rolling out annual contracts with short term payment fees for termination, until they do I will pull my finger out of my back side and simply move my money around to the provider offering the best package.

I am not in favour of a vanilla system of charges where my prudent efforts to build wealth are held back because of the (bank's) need to sub those individuals who do not bother to shop around.

Regulation/legislation is important without a doubt but I can't help but feel this further medling only aids to the ill feeling in markets that there will be yet more cases brought against large financial institutions... the only true winners in these situations appear to be the legal eagles. The envitable result is that all (incl. taxpayer subsidised) banks have a nother distraction from returning to profitability.

If the government really are putting the power back in the hands of the people perhaps they could start with allowing us to take some responsibility for financial planning...