Banks give with one hand, take away with the other

Business banking news review: week ending 3 July 2013

Personal and business bank account providers do their best to keep their customers on their toes – even as some make their offerings better, others get worse.

First up in the good news column is how many customers with basic bank accounts can now use a wider range of ATMs that belong to other financial service institutions. Bank of Scotland, Lloyds and TSB all have changed their Cash Accounts rules to allow customers to use any cashpoint that’s part of the Visa and Link network wherever they are – provided they don’t mind paying a nominal fee.

This is fantastic news of course, especially since NatWest and RBS, which are the last few banks to not yet give their basic customers broader cash withdrawal options, are scheduled to change that later in the year. However, just because banks are being nice to their basic account holders doesn’t mean they won’t try to take the piss out of their other customers – in particular anyone looking to use an ISA to make their savings pots grow.

The new Super ISA in particular has been an abject failure. Research has shown that banks have actually slashed their Super ISA rates by 10 per cent in the wake of the Budget according to the Bank of England. This means the average cash ISA rate stands at just 1.84 per cent – all without the official Bank Rate budging even an inch.

For what it’s worth, it’s truly the type of move that proves that banks and building societies may like to talk the talk when it comes to providing better levels of service to their customers but truly could not care less if their account holders are languishing in savings accounts with poor interest rates. The less money banks have to spend, the better – especially since they’re all oh-so paranoid about bank failures in the wake of the economic downturn several years ago – but no one seems to realise they’re almost all sitting on massive amounts of capital as a result. Kind of like a dragon hoarding their gold – and just about of friendly!

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