🔻 Question: Some people believe that banking services should be available for free, while others argue that banks should charge fees for their services.
Discuss both views and give your opinion.
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Banks are essential institutions that offer a variety of financial services, from providing loans and mortgages to managing savings accounts and facilitating
transactions. However, there is an ongoing debate about whether banks should provide these services for free or charge fees. Some argue that since banks are critical to the functioning of the economy and people’s financial well-being, they should not burden their customers with banking fees. On the other hand, others believe that banks, as businesses, have the right to charge for the services they provide to ensure quality and security. In this essay, I will explore both perspectives and present my opinion on the matter.
On one hand, proponents of free banking services believe that certain fundamental banking functions, such as opening a savings account or making transactions, should be free of charge. They argue that banking services are essential for everyday life, and fees can disproportionately affect low-income individuals. For instance, people who rely on small incomes might find themselves paying a considerable portion of their earnings in banking fees, such as overdraft charges or ATM withdrawal fees. Additionally, these fees can discourage individuals from opening bank accounts, pushing them toward less secure, informal financial systems. This could lead to higher financial exclusion, particularly in developing countries where access to formal banking is already limited.
Another argument for free banking is that many services, especially online banking, require minimal cost to maintain once the infrastructure is in place. With the increasing digitalization of banking, many customers manage their finances online, reducing the need for physical bank branches and customer service representatives. As such, critics argue that charging fees for online banking services or basic transactions is unnecessary and only serves to increase the profits of banks at the expense of consumers.
On the other hand, those who support charging banking fees believe that banks are businesses and need to charge for their services to remain profitable and provide secure, high-quality services. Running a bank requires significant investments in infrastructure, technology, and cybersecurity. For example, banks must invest heavily in securing online banking platforms and ensuring the safety of wire transfers and credit card transactions. Without the ability to charge fees, banks may not be able to maintain the level of service and security that customers expect. Charging for services such as currency exchange or investment advice is also seen as fair, as these services require specialized knowledge and involve risks for the bank.
In my opinion, while it is important to ensure that everyone has access to basic banking services, some fees are necessary to cover the costs of providing secure and reliable services. However, these fees should be reasonable and transparent. Banks should provide free or low-cost access to essential services like savings accounts, direct debits, and basic transactions, especially for low-income customers. At the same time, it is fair for banks to charge for more complex services, such as investment management, wire transfers, and mortgages, where the costs are higher, and the services provided are more specialized.
In conclusion, while the idea of free banking services may be appealing, banks need to charge for some services to cover their costs and ensure the quality of their offerings. However, it is crucial that these fees are fair and do not create barriers to financial inclusion, especially for those with limited resources. Striking the right balance between free access and paid services is key to creating a banking system that benefits both customers and banks.
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