Consumer advocate magazine Which? recently found that even the best business bank accounts in the UK are plagued with a myriad of fees that increase the cost of doing business, such as expensive overdrafts, poor interest rates on credit, and costly transactions overseas.
While many banks offer free business bank accounts, many customers are not reaping the benefits of truly free banking, according to research conducted by consumer advocate Which? in regards to the actual cost associated with hidden, complicated current account fees.
The recent study by Which? found that low interest rates on credit in combination with high charges on overdrafts on otherwise “no-fee” current accounts are still raking in the dough from unwary consumers.
The article in Which? detailed that while there are several free facilities that many current accounts offer, such as direct debit and cash machine withdrawals, these positive benefits are severely contraindicated by extremely low interest rates.
Additionally most customers feel no urgency in regards to hunting for the best possible deal since there are no up-front charges levied against consumers in regards to current accounts, as well as the perceived inconvenience behind the idea of changing banks.
Peter Vicary-Smith, chief executive for Which?, commented that the complex schemes that banks present any current account charges adds a layer of difficulty to the task of determining if consumers are choosing the best deal. Mr Vicary-Smith counseled consumers to seriously considering changing accounts in the case of repeated overdraft fees or markedly low interest rates.
Which? examined nearly 30 current accounts, finding 14 of them did not offer credit interest, and precious few beat the bank base rate of one half of one per cent, let alone match it.