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Discussion Starter · #1 ·
Does any one here bank with First Direct?

Just heard about the charge of ?10 a month if you balance goes below ?1,500!!

Think there are ways around this (opening a savings account with them) just wondered if anyone is going to move because of this - if so, which banks are offering a good deal??




New fees signal an end to free banking



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THE free banking enjoyed by tens of millions of people is under threat after a leading bank became the first to announce that it would charge for a current account.



First Direct, the online arm of HSBC, the UK?s largest bank, is to levy a ?10 monthly fee on its current accounts. Only customers who deposit ?1,500 a month or who maintain an average balance of ?1,500 will escape the fee.

Financial commentators said that the move would herald a rush by other banks to do the same. NatWest and Lloyds TSB said last night that they had no plans to introduce fees to their current accounts, but refused to rule it out.

First Direct?s move will come as a blow to pensioners, women on maternity leave and others who have low or fluctuating incomes, who may struggle to meet the stringent requirements. A First Direct spokesman said that around 200,000 of its 1.3 million customers would have to shoulder the extra fee when it is introduced next February.

Which?, the consumer organisation, said that the charge would penalise those on lower incomes. ?It is a shame that customers not in a position to keep ?1,500 in their account at all times are being penalised,? a spokesman said.

Alan Duncan, Shadow Trade and Industry Secretary, said: ?This is an irrational basis for charging. This is simply a tax on the lower-paid which will prevent access to bank accounts. I cannot see any way in which this is fair or justified.?

John McFall, Labour chairman of the Commons Treasury Select Committee, said the ?1,500 figure was a high hurdle and did nothing for those who were financially excluded. There should be an honest debate about the concept of free banking, he said.

Several banks charge up to ?15 a month for packaged or premium current accounts, which come with perks such as free travel insurance or cut-price currency exchange. But they also offer free current accounts.

First Direct?s announcement comes just weeks after the Office of Fair Trading said that it would investigate current account charges, prompting experts to predict an end to free banking.

Banks make nearly ?5 billion a year from unauthorised overdraft charges. The OFT is investigating whether to cap these fees. Defaqto, a financial pro-ducts research business, said that any cap could signal an end to free current accounts as banks try to claw back the money they lose.

Customers will need to earn at least ?24,000 a year before tax to meet First Direct?s minimum funding requirement of crediting ?1,500 a month. But the bank says that people who earn less than this can have the fee waived by taking out another of its products, such as a credit card or mortgage.

Which? said: ?This move will certainly alienate many thousands of customers unfairly targeted for choosing to have products with other providers who may be more competitive.?

First Direct charges between 15.9 per cent and 19.9 per cent interest on its credit cards. Other banks charge less: Intelligent Finance charges 8.9 per cent on its flatrate Visa, while Co-operative Bank charges 9.9 per cent on its Clear Visa card.

David Black, head of banking at Defaqto, said: ?First Direct has created a sort of halfway house of a fee-charging account and we are going to see a stream of similar accounts in the future. They are trying to corner the affluent end of the market.? HSBC, First Direct?s parent, said that it had no plans to follow the online bank?s example.

The OFT is expected to report early next year

 

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It is a bit of a cheek isnt it!

However the level of service from first direct blows any other bank out of the park in my experience. I have a ccard so I should be cool. Their insurance products are quite reasonable though so maybe a home insurance quote will waive the fee.

I read somewhere that if you deposit 1500 a month its waivered too. You could always set up a standing order to make up the amount (if you dont depost that much) from someone else then pay it right back. I think the move is to facilitate a varied financial portfolio for its customers which dare i say most seem to have already - from reading their research.

I'm not going anywhere!

First Direct current account - 10 pounds. Coffee - 2 pounds. Sitting on your sofa scratching your nads in your dressing gown whilst banking - priceless!
 

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I don't think it is cheeky at all - I welcome it.  If First Direct can reduce costs by getting rid of dormant account, then it just means better interest rates for the rest of us.
 

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I think its wrong. If it sparks a race for everyone else to do the same, then fact is some of us will be a tenner down each month just for having a bank account. may not sound alot to some, but yet another tax on modern life and another chunk out of the ever shrinking 'my money' pot...

I have never paid a penny for a bank account in my life, and never will.

They already make a packet from people who are in their overdraft etc, and in return offer you no incentive whatsoever for those who save and put it in their current account. A rate of what, 0.00000000000000000000001% interest on your current account. And they expect you you keep over four figures in there at any time when you could be earning near on 5% on in....

Oh, and ?1500 a month deposit, thats nigh on 25k a year. Half the population doesnt earn that...

Easy way round it, take a credit card out with them and cut it up as soon as you get it...

But the fact is, you shouldnt have to.
 

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Milkfloat - thats rubbish mate! Its unlikely to cost FD anything near the amount it will gain in monthly fees to maintain dormant accounts. If you earn enough of course you'll welcome it as it doesnt affect you. The the point is some (including me) dont so why should we incur yet more costs and have a judgemental banking system.

I went to first direct because out of all the banks they have fewer overheads than others and are backed by HSBC.

They are VERY unlikely to increase the rate of interest in a current account based on this.

Its another con to being an honest person trying to make a living
 

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It is not a con at all. If you pay in ?1500 a month you pay no charge. If you don't then go elsewhere. First Direct pay a decent amount of interest on their current accounts already compared to all the other banks. There will always be bank accounts catering for those who cannot pay in ?1500 a month (i.e you salary). First Direct have given people the option of getting around this by opening a savings account or having a credit card with them, which means no charge for your current account. This costs you nothing.

Banks do not do what they do for fun, it is for money, if you don't like it switch, don't moan like babies. They are not there at your whim and call, they are there for shareholders.

I guess I am just used to banks in other countries - where charges are common for everything but you get better interest rates. The UK is just starting to come in line with the rest of the world. trust me - it won't affect you much.
 

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Discussion Starter · #7 ·
Well, i dont want to pay ?10 a month so i have moved to Alliance and leicester.

Does anyone have an account wirth A&L?

If you say you introduced me, we both get ?50!! PM me if interested. (although i can only do this once, so first come...
 

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this was tried in the 80's all the banks followed suit ... then one broke ranks and ate up 30% of the private banking market...

Personally I think its right... We have several businaess accounts and the charges are astronomical... 50p for every ?100 we bank? ?80 a month for a ?1000 overdraft?

Its about time businesses especially small ones stopped having to fund the British public with the likes of minimum wages and excessive bank charges and massive wate charges and council taxes..

The public need to be woken up like businesses have been and then maybe you lot might do something about this flipping government.
 

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My mother used to live in France and there she had to pay each month for the privelage of having a "Switch/Maestro" type card. Part of the banking system there and I believe all French banks did/do it.

I've mixed views on the new FD charging thing - I have a FD savings account but bank with HSBC. Will be pretty gutted if it turns out all banks start this procedure and I can just see HSBC following as they own FD.
 

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I am with first direct and i think they are the best bank in the world. The customers service is second to none, but then the amount of money they make from us having our money in the accounts they should be like that.

Banking is a strange game and they get to do what they like. I don't have to pay the fees and i agree that this will get rid of the dormant accounts and let FD concentrate on there valued customers, This thing about it being only for rice people, it quite easy to get the fees wavied.

All there saying is, if you don't really use our bank then you will be charge.

The way i see it is HSBC, Natwest and Lloyds TSB are the only decent banks left. The rest will have the shirt off your back.

There are alot of other things that have changed like not getting charged for going over your overdraft for a few days and things like that. And there First directory service is ?12 a month and this includes travel insurance and mobile phone insurance. If you have that the fee would be wavied.

Well as you can tell i am sold and happy to stay with First Direct.
 

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I'm with Lloyd's tsb and pay ?15 per month

that includes full AA cover, holiday insurance for me and the misses,card protection and there was a few other things that i cannot remember. just for the AA cover alone to pay myself it would cost over ?100 a year.
 

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I'm with Lloyd's tsb and pay ?15 per month

that includes full AA cover, holiday insurance for me and the misses,card protection and there was a few other things that i cannot remember. just for the AA cover alone to pay myself it would cost over ?100 a year.
?15 x 12 = ?180

AA = ?100

Holiday insurance all inclusive for the year multi trip, anywhere in the world etc > ?60

I still think your bein done but perhaps only slightly.
 

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I'm with Lloyd's tsb and pay ?15 per month

that includes full AA cover, holiday insurance for me and the misses,card protection and there was a few other things that i cannot remember. just for the AA cover alone to pay myself it would cost over ?100 a year.
?15 x 12 = ?180

AA = ?100

Holiday insurance all inclusive for the year multi trip, anywhere in the world etc > ?60

I still think your being done but perhaps only slightly.
mobile phone insurance as-well. had a claim off them this year for a new phone.[Y]

never really added it up like that,if i get about what i pay out back in benefits then I'm not too fussed[:D]

wonder what the other guys on here are paying [:^)]
 

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I bank with First Direct and have done since they started up.

I don't think them charging a tenner a month for an account is a big deal if it means I get a better service then charge away.

Claires already going to close down a savngs account with them as she doesn't use it. So what they are planning does work!

J.
 

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Discussion Starter · #16 ·
Just a reminder that im still willing to be 'introduced' to Alliance and leicester... and we both get ?50!!

PM me people
 
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