RBS may charge to keep money in accounts

26 July 2016
RBS may charge to keep money in accounts

The financial situation, post EU Referendum, is frankly, a mess. The Bank of England are weighing up whether or not to cut base rates below zero, and as a result, RBS Group have issued a warning that customers could be charged for their accounts, even if they're in credit.

That's a negative interest rate, for people who bank with RBS, NatWest, Ulster Bank, and more.

Business and commercial account holders have been told about the potential changes, which means people will lose money.

The letter said: "Global interest rates remain at very low levels and in some markets are currently negative."

"Dependent on future market conditions, this could result in us charging on credit balances."

Now, currently, the BoE's base rate is at a low of 0.5%, and some people are suggesting it should be cut further, in a bid to get the economy going. However, if they do, customers of the banks in the RBS Group could lose money, just for having it in an account.

If this happens, it'll be the first bank in history to charge negative interest rates in the UK.

A spokesperson for the banking group said: "We will consider any necessary action in the event of the Bank of England base rate falling below zero, but will do our utmost to protect our customers from any impacts."

At the moment, BoE governor Mark Carney is still saying that there's a reluctance to drop rates below 0.25%, saying: "If interest rates are too low or negative, the hit to bank profitability could perversely reduce credit availability or even increase its overall price."

It looks like personal customers wouldn't be affected by this (don't hold your breath though) as the RBS Group would focus on business accounts with such a move.

Hardly the comforting news we're all looking for as Britain heads toward Brexit.

TOPICS:   Banking

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