Friday 28 October 2016

Ten things you can no longer do at the bank

Five years after the €85bn bailout and the banks still give us a raw deal

Published 15/11/2015 | 02:30

From mid-November, Bank of Ireland customers won’t be able to withdraw less than €700 from their account over the counter — or lodge less than €3,000 cash
From mid-November, Bank of Ireland customers won’t be able to withdraw less than €700 from their account over the counter — or lodge less than €3,000 cash

The move by Bank of Ireland to restrict over-the-counter cash withdrawals and lodgements is just one of the many ways that banking customers have lost out over the last few years.

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All of the Irish banks have been busy chopping the products and services they provide to customers - as well as making many of them more expensive.

The move by Bank of Ireland is particularly worrying. From mid-November, Bank of Ireland customers won't be able to withdraw less than €700 from their account over the counter - or lodge less than €3,000 cash. Customers must instead do so through ATMs. Small cheque lodgements will also have to be made at ATMs.

The bank insists that vulnerable customers and elderly customers who are not comfortable using ATMs "will be assisted by branch staff to use the self-service device or at the counter where available". But this move doesn't just put vulnerable and a lot of elderly customers out - there are many people who prefer and trust face-to-face interaction when managing their money.

Although the other Irish banks told this paper they have no plans to introduce similar restrictions to Bank of Ireland, it's only a matter of time before they follow suit, according to banking experts.

"All the banks are heading down a similar route to Bank of Ireland," said Jim Hegarty, chairman of Hegarty Financial Management. "I've heard of cases where you have to make an appointment to see a teller in certain bank branches - rather than queue up on spec."

Banking expert Ronan Coburn of The Bottom Line described BoI as "the stalking horse for other banks to follow shortly". "The elderly and small personal clients who don't use ATMs are loss-making [for banks]," said Mr Coburn. "In most cases, the bank clerk has to even complete their paper withdrawal or lodgement slips."

The idea of a cashless bank seems to be a bit of an anomaly - yet this could well be the future of Irish banking. KBC Bank, which describes itself as a "cashless bank", has hubs rather than branches. You can't withdraw or lodge cash over the counter at these hubs - you must do so electronically.

"Banks have been moving out of cash for a long time," said Professor Ray Kinsella, who is part of the advisory panel of the International Academy of Retail Banking. "This whole process has been driven by cost. The banks are configuring the availability of services and pricing to suit their investors without taking proper account of the interests of customers. This is not why there are there - and it's not why they were rescued."

The banks have taken a lot of things from us in recent years. Here are ten things you can no longer do at your bank.

1 Lodge cash without a wait

We all know the feeling. You head to your bank during lunch break to lodge a cheque - only to be faced with the sight of a mile-long queue for a cash desk that is manned by one teller.

Head later than lunch break and the cash desk could even be closed.

Permanent TSB for example shuts its cash desks from 3pm - even though its branches are normally open until 5pm on weekdays. Some EBS branches shut their cashier desks at 4pm even though its branches are normally open until 5pm.

The other Irish banks don't close their cash desks any earlier than normal. However, some BoI branches only allow over-the-counter cash transactions on certain days of the week.

2 Get a safety deposit box

The Irish banks no longer offer safekeeping facilities to new customers - that is, the ability to leave a sealed envelope with the bank which it then keeps in a safe place. Most banks are also trying to phase out their safekeeping services altogether - so it is only a matter of time before customers who already have items left in safekeeping with a bank will no longer be able to do so.

As most banks did not charge for this service, this was a handy way for many customers to keep valuable documents (such as house deeds) and other items safe - although banks typically did not insure any items held in safekeeping as it was up to the customer to do this.

3 Get no-strings free banking

During the boom years, no-strings-attached free banking was pretty much a given - indeed, some banks even paid you a bonus to switch your current account to them. Those days are long gone.

In July 2013, Ulster Bank became the last bank to pull no-strings free banking.

As a result, most of us must now pay between €18 and €48 in account maintenance fees a year to have a current account, depending on the bank. Unless you're with BoI, you can avoid these fees - but only if you can either lodge a few grand into your account each month or keep a few grand sitting there.

The easiest bank to dodge these fees with is Permo. As long as you can lodge at least €1,500 into your Permo account each month, you won't get hit for account maintenance fees.

There is no way out of BoI's €20 a year in account maintenance fees - and you must keep at least €3,000 in your account to avoid the bank's day-to-day transaction fees.

Permo and Ulster Bank are the only banks that don't charge daily transaction fees regardless of the balance you have in your account.

Some customers are entitled to free banking - primarily students and those aged over 60 or aged 66 or more (depending on the bank).

4 Get a travellers' cheque

It's been a few years since the Irish banks stopped offering travellers cheques.

Furthermore, it used to be possible to cash in travellers cheques over the counter - but unless you're an Ulster Bank customer, you must now lodge those cheques directly to your bank account. Ulster Bank is the only bank that allows you to cash travellers cheques over the counter.

5 Get a small Sterling bank draft with BoI

Since October 2012, BoI customers cannot get foreign currency bank drafts that are worth less than the equivalent of €500.

None of the other Irish banks require you to spend a minimum amount on foreign currency bank drafts.

6 Walk to your nearest branch

More than 160 towns have lost their local bank over the last four years because of a massive cull of bank branches since 2012.

It's another blow to rural and suburban Ireland. AIB has closed 67 branches since 2012 while EBS has closed 18. All 27 National Irish Bank branches around the country shut up shop in 2012 when it rebranded as Danske Bank. Permo has shut 16 branches while Ulster Bank has closed 27 and BoI eight. ACC Bank closed all of its branches and business centres last year.

This has forced many people, in particular the elderly, to rely on their local post office or credit union to manage their money - because their nearest bank could now be a half-hour drive away, rather than a short walk.

Those in rural areas which are badly served by public transport links are at a particular disadvantage. Some people in rural areas can't drive - particularly the elderly or immobile. And even for those who can drive, a one-hour return trip (or more) could easily put you off lodging a small cheque or managing other money matters at your bank.

The nearest ATM for many rural villages is their local convenience store - and some villages don't even have an ATM.

7 Get a tracker mortgage

It's almost eight years since banks stopped offering tracker mortgages to new customers. These mortgages are the cheapest around. The interest charged on today's mortgages can be as much as four times that paid by those with a tracker.

8 Get a far-flung foreign currency

For those heading off the beaten track, it can be hard to buy less popular foreign currencies such as Icelandic kroners, Thai Bahts and Venezuelan bolivars at banks. "Some banks won't even order these currencies in for clients," said Mr Coburn.

9 Get interest-free cash with your credit card

You can no longer withdraw cash with your credit card for free with certain banks. Since March 2014 for example, BoI has been charging credit card customers interest from the moment they use their cards to withdraw cash. Previously, they could avoid getting hit with interest on such credit card borrowings if they repaid their credit card bills on time.

Ulster Bank and Tesco Personal Finance are the only other banks which hammer you with interest the minute you use your credit card to withdraw cash - even if you repay your bill on time.

10 Get a decent interest rate on your savings

Eight years ago, some banks paid as much as 7pc interest on regular savings accounts. Today, you'll be lucky to get 3pc interest and some banks pay as little as 1pc interest or less.

Some banks paid as much as 5pc interest on a lump sum deposit of €10,000 back in 2007. Today, you'll be lucky to get 2pc.

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