Banks put heat on charities: As some voluntary groups are asked to start paying account charges, Andrew Bibby investigates the alternatives

NATWEST BANK has thrown a spoiler into the second birthday celebrations of the Ashtorre-Rock Community Centre at Saltash, Cornwall. The centre, which juts out into the River Tamar, provides many of the town's older people with a place to drop in for tea and coffee, and even has a balcony where they can toss out a line to catch crabs. But lately the crabbing has been over the bank's plan to end free banking for the centre.

'We're exceedingly proud of the centre, and rightly so,' said Lynn Marsh, secretary of the Waterside Community Association, which runs it. 'It took 10 years to complete the original idea, with the aid of lots of begging letters, jumble sales and coffee mornings.'

However, just as the centre reaches its second anniversary of opening, the bank has informed the committee that from 1 March it will be charging 64p for each credit or debit on the account, plus a quarterly charge of pounds 6. 'In the interests of the association, we have had to look for somewhere else to bank,' said Ms Marsh.

While high-street banks ponder the introduction of charges for personal customers, an increasing number of community organisations and clubs are being asked to pay for their banking facilities. The move comes just as many voluntary groups are suffering from cuts in local authority grants.

The village hall at Beckley, near Rye in Sussex, also had its free banking withdrawn recently by NatWest. 'Everything is done entirely voluntarily, with people giving their time and money to help,' Ron Annetts, chairman of the management committee, said. 'We really deplored their approach to a charity. It's difficult enough to run a village hall without these extra pin-pricks.'

A NatWest spokeswoman said that the charges which the Saltash centre had been asked to pay were its standard tariff for charities and societies, though she added that in certain circumstances, managers had some discretion. 'It's not our policy to make a profit on charity accounts,' she added.

Both Lloyds and Barclays treat voluntary organisations in the same way as small businesses but say branch managers can choose to waive charges, especially where usage of the account is low. A Lloyds spokesman suggested that this might mean less than 15 credits and debits a quarter.

By contrast, Midland has established a fixed threshold of 25 transactions a quarter: below this level, clubs and voluntary organisations enjoy free banking. If the threshold is crossed, however, each debit costs 74p, the cost partially offset by the 1 per cent interest paid on average credit balances.

Girobank may offer the most straightforward cheque account for voluntary groups. It makes no charges for accounts held by non profit-making concerns, which can use the bank's arrangements with post offices to service their accounts.

'It's something we've done for quite some time, and certainly at present have no plans to change,' Stewart Gunn, a spokesman for the bank, said.

Girobank was the choice of Beckley village hall after it had failed to persuade NatWest to reconsider its imposition of charges. By contrast, the Waterside Community Association expects to take its business to Lloyds Bank in Saltash, which has just written to offer them free banking.

While charities and voluntary groups may have to bob and weave to avoid current account charges, there are more possibilities open to them with deposit accounts. Abbey National relaunched this week its Charity Investment Account for minimum deposits of pounds 500, paying gross interest starting at 4.3 per cent. Most building societies offer similar deposit accounts for charities, that also pay gross, with smaller societies tending to have better rates.

However, registered charities can also take advantage of the Charities Deposit Account of COIF (the Charities Official Investment Fund), which currently pays approximately 6 per cent gross on all deposits.

COIF, itself a registered charity, was established under a provision of the Charities Act 1960 and is now managed by Church, Charity and Local Authority Fund Managers (CCLA), which also manages Church ofEngland funds. The Charities Deposit Account offers access to money market rates for small charities, but suffers from a relatively low profile among potential users.

Beckley village hall's treasurer, Mary Howse, discovered the COIF deposit account some time ago, and now uses it for the hall's sinking fund for maintenance work.

'We have a working balance of a few hundred pounds in the bank, and everything else goes in there. The interest rate's excellent,' she said.

In most respects, the COIF account operates like a traditional instant-access building society postal account, with repayments automatically credited, on request, to the charity's designated bank.

(Photograph omitted)