Banks Propose New Charges for Business Cash Deposits

In a move that will upset many businesses, it has been announced that leading UK banks may decide to start charging for business cash deposits.

No surprise there. In fact, this is something I’ve seen coming for a long time, and it wouldn’t shock me if we see it being implemented by some very well known banks by next month.

Why is all this happening you might be wondering? According to senior bankers, it’s mainly due to the falling interest rates, which means, of course, the banks need to make up the shortfall from their lack of profits. Who has to pay for it? The hard working business owners of the UK…that’s who.

If this includes your business then you might be thinking they don’t have the power to just suddenly change the terms and conditions of the business banking agreement you have with them. Actually, this is not the case, as many of the well known banks such as Lloyds, HSBC, and RBS all have sneaky little clauses in the small print that allow them to simply change whatever they want about the agreement you have with them, and there is nothing you can do about it.

To show they are serious, RBS wrote a letter to all of its business banking customers recently, telling them in no uncertain terms that if the Bank of England base rate drops below 0% then charges for business deposits will be happening with immediate effect.

They certainly are not messing around with this, and if they go ahead like many expect then it would be the first time in UK history that a business would have to pay in order to deposit cash into their local high street branch.

How will business banking customers react to this? In my opinion, many will start to look elsewhere, away from the big names like RBS, Lloyds and HSBC, and towards more smaller banks that will no doubt see not charging for cash deposits as a way to get more customers in a competitive industry.

The main problem though is that many of these smaller banks don’t have a presence in many towns around the country, which would make depositing cash for a lot of┬ábusinesses a real hassle, as not many people want to travel miles just to pay in a few hundred pounds.

I suppose we’ll just have to wait and see what happens with the Bank of England on this one. If they stop the interest rates going below 0% then all of this can be avoided and millions of business owners will be happy.

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