Simon Read: If we want to shake up current accounts, we could go back to paying for them. Why not? Free banking is a myth
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Your support makes all the difference.When I mentioned to my wife on Thursday morning that the Competition and Markets Authority had launched a full investigation into the current account market, she sighed:. "Another one?"
It feels a bit like that with current accounts. We have been complaining about them for years.
On some reckonings, this will be the seventh big inquiry into the banking sector in 14 years – and it is set to drag on for as long as another 18 months. The final report is not due until May 2016.
You can bet that the banks will pre-empt any proposals that emerge from the report, so that by the time it's eventually published, they'll be able to show they've already acted positively.
But that doesn't mean we shouldn't welcome the chance to re-examine the current account market. It is, frankly, a total mess. Why? Because there's a huge disconnect between what we want from our banks and what they try and flog us.
Most people just want somewhere their wages can sit until they need the money. Then they want to be able to pay for purchases as efficiently as possible.
So banks take this simple premise and cloud it with a range of extras – travel insurance, breakdown cover and the like – that are useless to many and inappropriate for some. And then they take a huge fee or sting their customers with overdraft charges. Meanwhile, they tempt those among us with savings by dangling decent interest rates – but only if we fulfil certain conditions, such as keeping our account constantly in the black and depositing at least £1,000 every month.
It means it's nigh on impossible to work out what the best account is. That has to change. Banks must simplify current accounts so we only pay for what we want.
I'd like them to go right back to the old days when bank accounts were a service we paid for – not a product designed to give banks ever-increasing profits.
That's not a popular view as most people presume a bank account is free. It's not. It has to be paid for one way or another, whether it's by selling you expensive insurance, or charging outrageous amounts if you're ever unfortunate enough to slip into the red.
I'd prefer to know how much the service costs, and how much the extras cost. If banks published a tariff, it would be easier to budget for charges and, crucially, easier to compare rival accounts so that we know if we need to switch to save cash.
As to that latter point, anyone who hasn't switched accounts is almost certainly paying too much for their banking.
s.read@independent.co.uk
twitter: @simonnread
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