The number of current accounts that charge customers now exceeds the number of free banking accounts. That’s the conclusion of a recent report from the Financial Times which has found that free banking in the UK is in decline as more and more banks charge for banking services.

The newspaper reports that there are now 58 free accounts open to customers, down from 65 in 2009. Plus, experts expect this number to fall further in coming years as banks’ profits from banking falls.

Shop around for the best current accounts

While the best free bank accounts are now harder to find, the newspaper also reported that the range of benefits offered with packaged current accounts was rising. As the cost of banking has risen, the insurance products and other incentives offered with such accounts have also grown.

The Financial Times found that the average cost of a packaged account has risen from just over £10 per month in 2006 to more than £15 today. The Financial Services Authority (FSA) now estimates that more than 14 million customers pay a monthly fee for their current accounts.

Number of free current accounts set to decline further

The best bank accounts may all carry a fee in the future as experts believe that free banking facilities will continue to decline as profits from bank charges fall. In 2008, the Office of Fair Trading (OFT) estimated that the average yearly revenue made by a bank on a current account was £152, although legal challenges to overdraft fees and charges have reduced this.

While the best current accounts may increasingly come with a monthly charge, free banking is still widely available. At compareandsave.com, we carry details of the free bank accounts which still offer 24 hour service, a chequebook, online banking and nationwide ATM usage.