In the UK there is a gap between the perception that banking is ‘free’ and the reality. Banks that offer so-called free accounts cover the cost of running them with high penalty charges and hidden fees. So it’s often the most financially vulnerable customers that pay the price for this ‘free banking’. Which in our minds, is an unjust and questionable practice. 

The 2018 FCA's High Cost Credit review showed banks made a huge 2.4 billion a year from overdraft fees. Banks have been asked to stop confusing consumers by hiding their excessive fees. Triodos was one of the voices challenging the status quo and calling for change. 

True to our values of transparency, Triodos has made a point of being upfront about the true cost of running a current account and the way we apply fees and charges. All our current account customers share the cost of running the account equally and pay a flat £3 monthly management fee for the service they receive: including online banking, ATM withdrawals, unlimited money transfers, an eco-friendly contactless debit card, cheque books on request, a friendly UK-based customer service team, and all the essential banking services you’d expect.

The reality is that there is no such thing as free banking – it’s simply a myth that we have come to believe is true here in the UK that goes back to Midland Bank beginning the trend in 1984. However charging for a current account is normal in continental Europe and the US. Banking is a service and that service costs money, whether it’s the physical cost of manufacturing debit cards, the development costs of a banking app or administration costs to service an account. By charging people transparently, we have challenged the common practice of high street banks and contributed towards the debate about how banks earn their money, as well as what fairer fees and charges look like.

Look at it this way: just as organic food represents the ‘true cost’ of food production, we’re being transparent about the true cost of running a current account (though in truth, at our current size the monthly fee doesn’t fully cover our costs to run an account).

The idea banks can offer ‘free’ account services, while generating excessive profits by charging often financially vulnerable customers excessive charges, doesn’t seem right or fair to us. No other bank in the UK has been bold enough to say this as we have done. Launching with this approach to charging was a bold move. Our initial stance is partly why some of the media named us ‘Britain’s first honest bank’. It’s a title we’re very proud of.

We think it’s time that banks start to act responsibly and in the long-term interests of their customers – both in terms of their fair treatment and in ensuring they are lending customers’ money in a way that creates a fair and more sustainable future.