Free banking when it comes to current accounts? Hardly.

When it comes to current accounts, the debate over whether ‘free’ services should be supplied by banks is a lively one – but you’re never really getting anything for nothing when it comes to financial service providers in the UK.

Oftentimes you’ll hear a bank answering complaints about poor customer service by stating that it simply can’t afford to supply better service because they supply free current accounts. ‘Well,’ they’ll say, ‘we can provide better service if we charged,’ they say, and the thinly-veiled threat makes people beat a hasty retreat.

Meanwhile, if you think you’re getting something for nothing out of a high street branch, you probably need to have your head examined. Every time you’re hit with an exorbitant overdraft fee or have to maintain a criminally high minimum balance to avoid other charges, you’re essentially paying for your current account.

Many banks and building societies have to cut corners elsewhere in order to provide the ‘free’ services, as not everyone ends up using an overdraft facility. Why do you think the interest rates on savings accounts are so abysmal, if not to keep more cash in your bank’s hands so it can pay for the upkeep on these ‘free’ current accounts?

Still, the hubris of the banking industry knows no bounds, illustrated by Sir David Walker’s statements recently. The new Barclays chairman said that the free banking causes mis-selling scandals, which sounds a bit rubbish considering UK banks make somewhere around £9 billion a year on so-called ‘free’ current accounts.

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