Expert: Current accounts unlikely to be free for much longer

An expert believes that few banks will offer current accounts with no charges in the near future.

Current account holders may soon have to pay charges on their products as such deals are unlikely to be available without fees for much longer, an expert has stated.

Writing for online resource Lovemoney.com, John Fitzsimmons noted that "what we understand as free banking may be dead within a year", as the country's financial services sector is being forced to adapt and change according to the post-recession monetary landscape.

Mr Fitzsimmons explained that "some banks already charge a monthly fee for their current accounts" on the basis that customers are then offered additional services such as travel insurance and breakdown car cover as bonuses and added this would "become the norm" if financiers "had their way".

He added that the Commission of Banking's report on how the country's fiscal sector operates is due next September, meaning that lenders may have their wish within the next 12 months.

This comes after Ed Bowsher, also of Lovemoney.com, said recently that consumers need to check the overdraft charge attached to their current account.

Meanwhile, anyone with a current account should be fully aware of the charges attached to their overdraft, an expert has said.

Taking the time to compare savings on the most attractive current account deals available in the UK might be a good idea for people who are perennially overdrawn, if one specialist's comments are anything to go by.

According to Ed Bowsher, head of consumer finance at online resource lovemoney.com, individuals should make sure they check whether or not overdraft facilities are charged via a daily fee or with an interest rate before they join a bank.

Mr Bowsher noted that many people "aren't aware" they will face a fee for going overdrawn, while some "don't know" how large any charge will be.

Therefore, heeding his advice could avoid the possibility of having to use a savings account to afford to pay these unexpected bills.

The expert was speaking after the Bank of England revealed earlier this week (December 6th 2010) that rates for authorised overdrafts reached a record of 19.09 per cent in October.