Bank Charges
Banks are a commercial business, and so impose charges against you for the provision of some of their services. Unlike the interest they pay you for the use of your funds for their lending services, these charges typically consist of a fixed fee for their services.
The number and range of charges and fees levied by banks against their customers varies widely from bank to bank. For example, some banks will charge a fee for overdraft facilities and some will not, whilst others still will only charge overdraft fees to certain customers.
In addition, the range of fees varies depending on the type of bank account you have. For example, there are certain fees that only apply to business banking.
Typical Charges
Overdraft Fees
Overdraft fees are those charges associated with any overdraft you may have for your current account. These can be fixed charges, arrangement fees or a percentage of the overdraft value.
Overdrawn Fees
Banks generally charge a fixed fee if your account becomes overdrawn or exceeds the amount of your agreed overdraft.
Late Fees
Late fees typically apply to the late payment of debt, and most often occur in relation to the late payment of an overdue credit card bill. Late fees can also be applied if you are late with any agreed mortgage or loan repayments.
Transaction Charges
Some banks will charge a fee for certain transactions. There has been a lot of discussion recently about some banks introducing charges for over-the-counter transactions as a way of encouraging the use of online services.
Electronic Funds Transfer Charges
Charges relating to the transfer or payment of funds electronically may be levied by your bank either directly or on behalf of an intermediary for the provision of the service. For example, most banks charge a fixed fee for making an electronic payment to an overseas bank account.
Cheque Charges
Banks may charge a fixed amount per cheque written to cover handling and processing fees. This charge is typically a low fixed fee of a few pence rather than a percentage of the amount of the cheque.
Credit Card Charges
Since the funds available through the use of a credit card are considered a loan, there are interest charges associated with the money lent to you through your credit card. On top of this some banks charge additional fees that are specific to the provision of the credit card, or for additional services such as purchase insurance.
Other Charges
Banks may levy specific fees or charges for other services you use. These charges will vary depending on the type of service, and you should always check with your bank to see if there are any charges associated with any new service you may use.
