Charities, community groups and sports clubs face a raft of costly new bank charges after HSBC axed its free accounts.
For more than a decade the banking giant has allowed charities and non-profit organisations to manage their finances for free, as long as they made no more than £100,000 a year.
But, from November, these small-scale organisations will be charged £60 a year to keep their accounts open.
New fees: From November, HSBC will charge charities and non-profit organisations £60 a year to keep their accounts open
The High Street bank has also introduced punitive new charges for branch transactions, including a 0.4 per cent fee to pay in and take out cash — £4 on a £1,000 donation — and 40p to deposit a cheque.
There is also a new 1.5 per cent fee when withdrawing change over the counter for fundraising events.
The new fees come in the wake of a gruelling 18 months for cash-strapped charities when many were forced to cancel fundraisers during lockdown.
Around a quarter of charities earning less than £10,000 were forced to halt all of their services during Covid, according to the Charity Commission.
HSBC acknowledged the fees are not a ‘welcome change’ but claims the cost of processing cash and cheques ‘continued to rise’.
Around four in five voluntary organisations have incomes of under £100,000, according to the National Council for Voluntary Organisations — which represents charities in England.
Rebecca Young, its lead policy manager, says: ‘Any increases in unnecessary costs, like banking charges, reduces the funding that can be invested in the key work of charities and the difference they make in every community.’
Fleur Anderson, chairman of the all-party parliamentary group on charities and volunteering, says: ‘It is appalling that HSBC would choose this time to start throwing unexpected charges.
‘Do they really need the extra money from these charges? People donate to causes close to their hearts and they do not expect a bank to take a cut.’
HSBC claims the new ‘charitable bank accounts’ — which will replace its community accounts — remain ‘very competitive’.
Yet several of its rivals — including Barclays and NatWest — still offer free accounts to charities with annual turnovers of less than £100,000. And Santander offers free treasurer accounts to those with a turnover of less than £250,000.
HSBC says: ‘Over the years, we have made significant enhancements to our business banking proposition to meet the evolving needs of our customers.
‘We will be increasing our charges in a way that more accurately reflects the ongoing costs associated with improving and maintaining [them].’
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