Free banking a myth, says Which?

Consumer group Which? says there are large variations between banks in the cost of "free" current accounts.

Which? says that its analysis "shatters the myth" of free banking.

It says the cost of going overdrawn without permission for two days a month costs from £120 to £900 a year.

But the British Bankers' Association (BBA) called the report "disingenuous", and said customers could get free banking for accessing cash and making most types of transactions in the UK.

Which? says that even customers with authorised overdrafts can run up large charges at some banks, including RBS/Natwest and HSBC, charging an annual percentage rate (APR) of 19.9%.

The group says that banks also make money from ostensibly "free" accounts by charging "hefty fees" for overseas transactions.

When Which? asked consumers how they felt, it says that more than 60% of those surveyed said they had paid a bank charge that they thought was "unfair, hidden or disproportionate".

The report comes a week after Which? said that a cultural change was needed at banks.