by Author Name Withheld 123

Created on: May 08, 2010

Things to be aware of before opening a bank account

The world of banking has many pros and cons to their structure of payments and interest and unfortunately the cons out weigh the pros by a long shot. Banks evolve entirely around money/finance which means they control everything you do financially.

There's an old saying “if you're good at something never do it for free” and the banks are fantastic at running numbers, investing your hard earned cash across the world to make profit. All banks are extremely sutle about how they squeeze money from your pockets and use it to make millions. Banks invest your money into the stock and share markets to make a profit, banking investors can easily make on average 60-120% profit with your money and yet we only see a return of 2% maximum with today's current interest rates. Yeah what is the problem with that? They give me money for doing nothing, right? Yes they do however your money isn't 100% safe with the banks. If the bank were to shut down then you would actually lose your money which means your risking your money with no guarantee of principal return for a measly 2% profit which is pretty meaningless. There are laws that state anything under £50,000 must be paid back if the bank were to shut down, anything over 50k is lost in the market and returned to the smartest investors across the world.

Parts of your banking agreement to keep an eye on

Overall every bank will charge extortionate rates for borrowing money for minimal transactions such as going overdrawn by pennies for anything over 24 hours. Unless you have asked for an overdraft on your account then going overdrawn can mean losing £25 for nothing! HSBC charge you roughly £25 every time you go over drawn which leaves you to ask the question “how can I go overdrawn if I don't have an overdraft?” This would depend on your account however the bank can charge for £25 plus interest daily until you pay back what you went overdrawn which means if you go overdraw by 10 pence then you will pay them £25.10 the next day. Extortion is an understatement for the bank and their rates of interest and “informal charges”.

Also be aware that many strange laws have changed over the past few years, for some reason the bank can take money out of your account now without permission if this money wasn't meant to be deposited to you. Several years ago banking agreements stated that anything paid or transferred into your account was considered your and the bank can only take it back if you give them permission which no-longer applies to the bank.

These small points alone can get you into many troubles with the bank and cost you money for simply nothing, overall bank accounts are extremely tricky and sneaky, when push comes to shove the banks have the power and it is wiser to avoid being involved with anyone who is looking to make money off you.

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