Charities with HSBC accounts face a host of new charges from November 2021 after the bank announced it will charge a £60 a year fee to keep the accounts open.
Website The Third Sector has reported that the bank has also introduced charges for branch transactions including a 0.4 per cent fee to pay in and withdraw cash, a charge of £4 on a £1,000 donation, and a fee of 40p to deposit a cheque.
Charities will also be charged a 1.5 per cent fee when withdrawing change over the counter for fundraising events.
HSBC has previously allowed charities and non-profit organisations to manage their finances for free, as long as they generated income of no more than £100,000 a year.
HSBC states that its £5 monthly charity account fee is lower than standard banking tariffs and its offer remains competitive, while the new account is not subject to the £100,000 annual income cap so will be available to a wider range of charities.
Membership bodies speaking to The Third Sector have warned that the increased costs will reduce the ability of charities to deliver services in the communities they serve.
Rebecca Young, lead policy and influencing manager at the National Council for Voluntary Organisations, pointed out that 81 per cent of voluntary organisations have an income of less than £100,000.
She added: “Any increases in unnecessary costs and banking charges will reduce the funding that can be invested in the key work of charities and the difference they make in every community.”
Clare Mills, head of communications and external affairs at the membership body Navca, said that “With HSBC introducing charges for charity accounts, many organisations will be faced with meeting these costs or dealing with the significant administrative and time burden that changing banks involves – and it’s unclear at this stage if other banks will be adopting the same new charging structure.”
Rita Chadha, chief executive of the Small Charities Coalition, stated that HSBC could have given charities more notice.
She added: “All organisations need to make money, but the banking charges being introduced by so many high street banks are doing nothing to ‘level up’ our nation.
“We would encourage all banks to look at the contradiction between their own CSR policies and their commitment to inclusion.”
A HSBC UK spokesperson said: “Over the years, we have made significant enhancements to our business banking proposition to meet the evolving needs of our customers.”
“We are committed to supporting UK charities and not-for-profits and are confident that our offer remains very competitive.”
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