How does the British system work?
Q How many personal current accounts are there in Britain?
A There are over 70m personal current accounts serving around 90 per cent of the population. The majority of them are free to use.
Q How unusual is it to have easy access to free current accounts?
A Britain is almost unique in having free current accounts as standard. In most other countries consumers expect to pay either a flat monthly fee or costs according to the number of transactions that they make.
Q Why do some people oppose the provision of free current accounts?
A They claim it distorts the market as banks seek to profit from hidden fees and encourages mis-selling of other products. They also say it makes it hard for consumers to compare services.
Q How much do banks make from private current accounts?
A For competition reasons few banks are willing to reveal earnings from current accounts. But in 2006 the Office of Fair Trading said the sector had revenues of £8.3bn – £150pa per active account.
Q How do banks earn money from personal current accounts at the moment?
A Most current account revenue comes from interest on balances and overdraft fees. But the FSA estimates 14m Britons already pay a monthly fee for a current account ‘package’, which may include benefits such as insurance.