Cheques and balances

Every couple of years the high street banks gently raise the prospect of bringing to an end the concept of "free banking" which we enjoy in the UK.

Perhaps one of them brings out a premium account with special add-ons like travel insurance and a theatre ticket booking facility in return for an annual or monthly fee.

Maybe another introduces an account where you pay a few pounds a month in order drastically to increase your overdraft level, so that the facility is there if you need it.

The incentive provided by the bank for the latter is usually that penalties for exceeding your authorised overdraft are likely to be hefty.

The aim in both cases is to soften us up for the end of free banking for current accounts in credit.

We've always had to pay handsomely for overdraft facilities, even when our average monthly balance is regularly well in the black.

But it irks the banks that in the US customers pay for some current accounts, in this country banks feel obliged to offer them for free.

So it comes as little surprise that , according to the Consumers' Association report, banks rip off customers by more than ?20m a year by failing to clear cheques for up to 11 days.

Banks make money from the difference between the savings rate they offer you and the borrowing rate at which they will lend you money.

Some of the banks' most popular savings accounts pay measly rates of interest, while research has shown that the most competitive mortgage rates are often from small mutual building societies, rather than the high-street banks.

Slowing down the cheque clearing process is just another way to make money out of customers without actually making them pay directly for their current accounts.

The growth of internet accounts, with banks competing aggressively for new customers, has so far had little effect on the charges levied by the high street banks.

Instead of lowering charges for branch-based customers as well as internet customers, many of the banks have launched new brands instead. This allows them to offer different rates and charges from their high-street products.

But as the number of people switching to the internet grows, this anomaly is unlikely to able to continue, and that can only be good news for the consumer.