UK online & telephone banking

Monty,

I saw this on the news before coming off-shore, but I thought the conditions were either £1500 had to be paid into the account or you had to maintain a balance of that amount....but I could have heard that wrong....

We bank on-line with the Bank of Scotland/Halifax (don't get me started on that one) and these conditions do not apply to either our normal current account, web saver accounts (one each) or ISA's (ok, totally different type of savings account but we can use/manage them on-line).

As far as the service is concerned, well, when it was BoS it was fine, I used 'phoneline' for years, without hassle or delays, I could be transferred through to my branch if required and I could understand the people on the phone.......when they were merged/taken over by the Halifax it all went tits up!! The telephone banking is a nightmare, but thankfully we don't need to use it that often, the internet banking is great though and I/we have no complaints at all.

Well, apart from - where the heck do they stick our money for 3-4 days earning interest off of it before it eventually goes into the account we were paying into in the first place......but I guess that's banks the world over.......

Hope this helps.

Cheers,
Ali

I think you are a bit confused.

The new charges apply to if you have an account doing in essence nothing.

Provided you have one account doing something, i.e. one account has 1500 coming in, then there is no charge on the other accounts.

Also if you have a mortgage or what ever with them then this stops the charge as well.

Basically I think they are trying to get 40,000 redundent accounts closed down.

Although its a shame my bank is the first to do this, there is little doubt all will follow suit very soon.

Ali,

I've just gone through the "small print" and yes you are correct - it is a minimum od £1500 pound to be paid in to each account from an external source i.e employer. However an internal transfer i.e. when I transfer money to our joint account, that will not count.

The other condition seems clear, that a balance of £1500 must be maintained on each current account held with First Direct. I never keep more than a small amount of money in a low interest current account.

Is this HSBA trying to get rid of it's personal customers so they can concentrate on commercial banking?

Cheers,

Monty

Well like many businesses, banks used to balance profitable operations with non profit but low risk, customer friendly services classed as loss leaders (current accounts lead customers to more profitable credit cards, loans, mortgages and insurance). However most banks now need to show a profit stream in each of their businesses and what's more, more profit than their competitors. It's the Western way innit. Undoubtably a current account is an expensive thing to run, hence lower interest rates unless there is a regular income coming in or a higher than typical balance. Or they start charging you, we know credit card fees will return soon for instance.

Offset this by either a) Buying shares in your bank! More profit = higher dividend or b) more practicaly perhaps, switch your account to somewhere more flexible. Plenty of Building Societies operate on line/current accounts with less demands placed on their margins as they are owned by their members, not shareholders so should be more cost effective. Most offer account switching services. Banks make much of their domestic profits through customer apathy or ignorance whether through banking charges or really crappy insurance products.

Google some options but as a for instance, Alliance & Leicester operate a phone/on line accout paying over 5%. Norwich & Peterborough are very easy to deal with and have On Line service and an interest paying current account and 0%/no fee credit card balance transfers. Nationwide are closest to a bigger bank which is good and bad in terms of products and service.

Vote with your feet so to speak.

quote:

Is this HSBA trying to get rid of it's personal customers so they can concentrate on commercial banking?

I don't know about the HSBA, but the HSBC might be

The conduct of banks in relation to our money will always be a contentious area. I guess that many people think of banks as simply a repository for their cash. The thought of being charged for this facility is considered unacceptable: ("Its my money, why should I pay the bank to hold it for me?"). The commercial reality is that banks are obliged to make profits to keep shareholders happy. This means that the ability of a bank to provide account benefits is dictated by the profit they are expecting to make from the use of those accounts. Unfortunately this is the world we now live in.

Hi Yeldarb,

Yes I guess people think that banks are simply a repository for my cash... but First Direct HSBC does make money out of me depositing my cash, it also makes money out the share dealing that I do via them and my current account.

What I have managed to do this morning is start looking at alternative options for managing my accounts and finances. I ought really to thank First Direct for their letter, because only after a few hours searching I can find much better deals, especially with regards to my share dealing account!

I will be voting with my feet, once I know which institution I will be moving to.

Thanks,

Monty

Yeldarb your argument is good up to the point that HSBC made £9b clear profit last year.

Which in essence makes then greedy bastards (Even by banking standards)

I have email FD to see what the deal is, if they intend charging me for my individual account then they can kiss good bye to me as well.

Belive you me, I do not approve of the profits the banks make. How they choose to charge us is sadly the commercial reality of the situation.

The trouble with voting with your feet in this sort of curcumstance is that there are increasingly fewer alternatives to go to.

Ut wouldn't surprise me if telephone banking came to an end before too long in favour of ebanking. The days of UK based call centres being cost effective are numbered given the competition from locations abroad.