Not long ago, I complained to my bank that the interest rate they were paying on my business reserve account was rather poor. At the same time, I indicated that the bank charges they were applying to my business current account were rather high.

A rather helpful chap there offered a number of solutions, including going to a new tariff for the current account, which allowed largely free banking. What he did not tell me was that I would no longer get more than a derisory rate of interest on my current account, so I now spend all my time balancing the accounts, to maximise the amount in the reserve account.

The point of boring you with all this is that I have just seen an article in the Sunday Times ‘Lenders rake in millions in fees’ that shows yet another way in which the banks are trying to get back some of the money they have lost as a result of the credit crunch.

The article actually relates to mortgages, but the attitude behind it infects all aspects of banking.

Its main thrust is that banks have increased their average mortgage fees by up to 183%, although in fairness to HSBC, which was the ‘worst offender’ in percentage terms, its average is still way below almost everyone else listed. The fact remains that in several cases these fees now exceed £1,000 and some are almost double the level of just a year ago.

The message is simple; if you are concerned about managing your wealth or planning your retirement then it is important to be aware just how much you are paying your bank for looking after your money.

In many cases, banks pay (usually a derisory level of) interest on instant access accounts. But when you compare this with what they charge borrowers, it suddenly becomes clear that what may appear to be “free” banking is actually far from it. In fact if an insurance company were to charge as much as many banks do on their products, the market would quickly desert them. Unfortunately, the banks seem to be able to get away with it, perhaps because few people look at the actual numbers; and in any event, they have limited options.

You should always take independent financial advice before making any decision regarding your personal or business finances; this includes anything as (apparently) simple as investing cash.

Why not contact Robert Bruce Associates for assistance?