HSBC Business Banking - £5.50 per month!

[Head]

If your client asked you to waive your fee and work for free because of whatever the good reason is (client going bust), would you do that?

Yes I would, and I have. This is about both negotiation and competition. If you don't ask, you don't get. And if you can get a better deal elsewhere, that's good for competition, which is good for everybody.

Under certain circumstances, where a very good, long-standing customer needs a favour, I have always been willing to negotiate my terms in their favour to maintain a good relationship. Sometimes that means putting in hours for free, but I value my clients and they appreciate the way I do business. What's more, all my clients have been with my business for more than 30 years, so that works, and both they and me have an excellent relationship and are very happy indeed.

HSBC makes good use of my money on deposit and pays virtually nothing in credit interest. It doesn't cost them any more now to provide my account than it did when they offered free banking. And as their profits continue to soar regardless, their 'couldn't care less' attitude towards their long-standing customers has become quite distasteful over the past few years.

As much as they say they are introducing these charges to make running our accounts simpler, they are actually doing it because they can. They doubtless won't have sufficient customers on their Business Direct tariff to make any difference to them if every one of those customers walked, so it's not an issue for HSBC at all. By the same token, the relatively small profit to be gained by charging these customers will be equally negligible. So why bother if it alienates your customers and puts yet another ding in your already poor reputation?

As an 'ex-banker' you clearly have a chip on the shoulder here, we can all see that. And that's fine. But try to see the other side; everybody's entitled to a view, and yours isn't necessarily always going to be the right one.

In fact if you were my bank manager I'd have closed my account with you long ago.
See what I mean?

[AtW]

In fact if you were my bank manager I'd have closed my account with you long ago. See what I mean?

Costs of having bank account with all the risks that involves (fraud, money laundering checks, etc) is much higher than some simple online registration that we have in our system.

It's entirely reasonable to charge for banking services - there is no such thing as free lunch or free bank account - someone always ends up paying for all this, usually through sneaky charges - something banks very good at but this revenue stream is not as big as it was.

It's fair to charge reasonable amount for a business bank account - their whole business is bank accounts, they should not be expected to give it away for free.

[AtW]

Not to mention that your business offers services for free...

Almost all websites do - ours free details data for your own sites only, paid data for competitor web sites.

If I was running a bank then equivalent "free" offer would have been something like - free bank account but you can only receive money.

[d000hg]

Banks have been giving accounts away for free for decades and yet they somehow manage to scrape together profits of several £billion each year.

Sometimes - and this will no doubt be hard for you to believe - banks give customers money to hold their account. Clearly this too is an oversight, I mean what kind of company pays customers rather than the other way round.

Muppet.

[AtW]

Banks have been giving accounts away for free for decades and yet they somehow manage to scrape together profits of several £billion each year.

It's uncommon practice around the world. Just like giving our "free" mobile phones - the reason it "works" is because customers are ripped off to make up for the "free" service: crazy fees for unauthorised overdrafts, missold pensions, insurance, tulipy "AAA" rated bonds. Should the banks earn money like this? I say - NO, they should charge for the services provided.

In our service we don't catch free customers with hidden fees - what we provide for free is actually free, compare it with:
1) "free" phone but you pay monthly fee
2) "free" bank account but you pay for transactions and get ripped off in many other ways

[d000hg]

It's uncommon practice around the world.

Paying interest is only uncommon in the Islamic world.


Banks don't make their profits from fees. They make it by lending money. Banks WANT you to put money in your account otherwise they can't lend it to someone else.

[AtW]

Paying interest is only uncommon in the Islamic world.

Banks in UK paid interest like most around the world, it's only recently they stopped because BoE prints money, why should they pay anything when they can get money free from BoE?

The issue is with BoE here, not banks who act rationally.

Banks don't make their profits from fees. They make it by lending money. Banks WANT you to put money in your account otherwise they can't lend it to someone else.

Right now banks can get free money from BoE.

[saptastic]

So what are the options, is Cater Allen good, any principal differences between CA and HSBC banking if someone had experience with both ?

Looks like they even have decent saving account rates, e.g. 1% for 9 months term (50K+), rather than 0.0000001% that HSBC tend to offer.

Have used both. Switched from HSBC to Cater Allen via Contractor UK.
CA is fine and good telephone customer service. Plus no transaction charges through CUK.
Tried to pay a cheque at Santander but needed to be RBS apparently. But I just got some pre paid envelopes now.

Also got annoyed that HSBC try to promote virus software when you login.
You press remind me in 14 days and yet Every day it pops up again. Little things....

[lilelvis2000]

Paying interest is only uncommon in the Islamic world.


Banks don't make their profits from fees. They make it by lending money. Banks WANT you to put money in your account otherwise they can't lend it to someone else.

Cant they just make up some derivatives, get some 'cash', then lend it out?

[doodab]

Banks have been giving accounts away for free for decades and yet they somehow manage to scrape together profits of several £billion each year.

Bank accounts have never been "free", those that didn't charge a monthly fee have historically been subsidised by extortionate charges on those who don't manage their affairs very well. Interesting chart here (http://www.ecb.int/events/pdf/confer...018c3c61f33260) shows that 52% of UK retail banks fee income is made up of exceptions handling as opposed to between 1% and 15% elsewhere. This income stream has been severely curtailed due to regulation. Also worth noting that income due to "cash utilization" i.e. making money out of the money in your account, is lower in the UK than any other country in Europe. This is basically because most British people & small businesses are skint, run on credit, and generally don't have a big pot of cash in the bank.

Fee-free banking is hardly universal, in many countries monthly fees are the norm and even in the UK many personal current accounts charge a monthly fee and most "proper" business accounts incur charges for all transactions. So I'd say £5.50 was pretty good value in the grand scheme of things.