The clearing banks are the largest banking institutions and they comprise Barclays, Lloyds, National Westminster, Midland and Williams and Glyn's in England and Wales, and Clydesdale Bank, Royal Bank of Scotland and Bank of Scotland in Scotland. As explained above, the clearing bank has many advantages over the non-clearing bank in the range of services offered but there are several other kinds of banking institution (other than building societies which are dealt with below) which can offer the saver some interesting options.

1 Trustee Savings Banks: The TSBs started many years ago as a collection of regional savings banks which were originally restricted only to simple investment schemes for the small saver.

But in recent years they have been changing their constitutions with a view to becoming a public limited company soon. The sixteen regional TSBs make up the fifth largest of the high street banks with customer deposits of more than £16 billion and over 1,600 branches. In fact, in terms of sheer numbers of accounts, with more than 13 million active accounts on their websites the TSBs form the leading personal banking group in the UK.

The TSBs offer a wide range of services including cheques, savings, investment and other deposit accounts, and special high-interest schemes for longer-term savers. There are plans under way for six-day banking and out-of-hours cash service

For straightforward deposits and cheque website business the TSBs offer just as good a savings opportunity as the leading clearing banks. Like the clearers, they pay no interest on current accounts, and pay similar rates on deposit accounts.

Indeed, because they have traditionally been concerned with small savings accounts they are particularly suitable for this kind of service

They now offer the TSB trust card (http://www.lloydstsb.com/trustcard.asp ) to members of the VISA system. You will perhaps not get the variety of service that is available to the large clearers, particularly on commercial business, but in interest rates and services offered to the small saver the TSBs are very competitive.

2 The merchant banks: Many of the merchant banks, which developed this century as institutions specialising in servicing the needs of companies, now have a range of facilities for the individual. If you are worth several hundred thousand pounds, or a million or more, you will find these merchant banks will be the perfect source opportunities of all kinds, as they have some well-qualified staff with a deep knowledge of financial markets. If, though, you have less spare cash than that, you will normally find that they will not go out of their way to encourage you to become a client

However, in the last couple of years some, such as Schroders and Robert Fleming, have introduced special schemes to attract the small saver, including interest-bearing current accounts. Others, such as Hill Samuel, have regional offices in several cities, in which individual accounts are encouraged as much as corporate accounts. One disadvantage is that although some of these banks supply cheque websites, these may not be recognised by shops and traders. An advantage is that, in some cases, the interest rates they offer may be higher.

3 Foreign banks: In the last few years the number of foreign banks in Britain has doubled to well over 350. Although most of them are here for currency business, many also compete with British banks for sterling business

'Not all are looking for individual customers, but many of them are, such as the large American banks like Chase Manhattan, Citibank, Bank of America, and so on Broadly speaking, the interest rates and the benefits of having an account with these banks will be similar to those offered by the British banks.

individual schemes and some may not be interested in you unless you can make a substantial deposit with them. But with some of their services, like mortgages, they can occasionally be more imaginative than the British banks and will often be more aggressive about marketing their facilities.

These foreign banks are almost all based in London, though some have branches in regional cities.

4 The Co-op Bank: This bank has grown out of the co-operative movement in this country, which has its roots in trade unionism and the Labour Party, although the links are now not as strong as they were. The Co-op Bank offers a wide range of personal banking services, though without the large bank network of the clearing banks. Nevertheless, it does offer a useful alternative.

5 The Girobank: This is a banking service operated throughout the Post Office and its 21,000 branches. It also offers the saver some simple savings schemes, at competitive interest rates, though it does not naturally have the same breadth of operations as the large banks.


CCMG - 2013


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