The government has devised an unpleasant law to compensate mortgage holders when banks fail to fully pass on interest rate cuts. In such cases, exit fees will no longer apply when customers switch to another source of money.
The banks will scream blue murder, but they can not have it both ways. If they fail to pass on a legitimate saving, then this law will prevent them locking the stable door and preventing the horse from bolting.
There is another anomaly that has been long overdue in being brought to public attention - and that is the interest rates paid on savings accounts.
The big. bad banks pay no interest on savings accounts that hold less than five hundred dollars - no interest on money held in cheque accounts - and a pitiful interest of less than one percent on savings of more than five hundred dollars.
But - if that little old lady who has loaned them her savings for years without interest has a sudden death in the family - and needs $ 6,000 for a funeral - expects them to be generous and give her a loan at a reasonable rate of interest - think again !
They will offer her a credit card attached to either Visa or Mastercard with an interest rate somewhere between 15% and 22%, depending on whether the card has a reward programme.
It is even worse for those with a substantial balance in a cheque account. Not only no interest, but hefty charges for the privilege of parking your money in their bank !
The entire money spectrum - banks, credit unions and building societies are not keen to give reasonable interest on savings accounts - simply because they have been getting away with it for years - and it is very profitable.
About time banking laws changed in favour of the little people !
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