High bank charges challenged by Which?
There are large variations between banks in the cost of "free" current accounts, consumer group Which? says.
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 more than 2,000 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 marketing concept of "free banking" was first introduced by the then Midland bank (now part of HSBC) back in the 1980s.
It was rapidly adopted by all its rivals, so most current account customers do not normally pay a monthly fee or a charge for every payment in or out of their accounts - so long as they are in the black.
However it has been pointed out for many years by the Competition Commission, the Office of Fair Trading (OFT), the Financial Services Authority (FSA), and the Independent Commission on Banking, that the term "free" is misleading.
That is because customers still pay a price for the service they receive, either by way of very high overdraft fees, or by foregoing any interest that they might otherwise be offered on the money in their current accounts.
John Howard, who used to chair the consumer panel at the FSA, told the BBC that regulators believe so-called "free banking" has been a bad policy for the banks to pursue.
"Customers don't know what the real cost of providing that basic banking service is," he said.
"It makes it more difficult for new banks to enter the market place because it is a very difficult thing for new banks to set up and match this free-banking-if-in-credit offer.
"And it does encourage banks to cross-sell other products, in some cases far too eagerly, and we have had too many instances of mis-selling," he added.
In the past few years banks have introduced so-called "packaged" accounts, where customers do pay a monthly fee, sometimes more than £25 per month, in return for extra services such as cheap travel insurance.
About 20% of UK current accounts are now thought to be of this variety.
Which? chief executive Peter Vicary-Smith said that this should not become the standard way for customers to pay.
He added that it might be illegal for banks to agree amongst each other to introduce standard account charges for all customers.
"It's a disgrace that the very people who bailed out the banks are being asked to pay more for the most basic accounts, while the industry continues to be rocked by scandals like PPI mis-selling, Libor rate-rigging and IT failures," he said.
The BBA said customers could avoid charges by not going overdrawn, which is a form of borrowing for which it is quite legitimate to charge.
And it insisted customers could have free banking.
"All banks publish a clear tariff of charges on their websites and provide customers with an annual summary of the transactions passing through their account including a breakdown of any interest and other charges," it said.
"If a customer wants to switch to another bank it's easy to do so and the industry is working towards making the process even easier."
In 2009, the OFT lost a two-year-long legal battle to regulate bank overdraft charges.
However, the regulator has continued to criticise the banking industry.
Last month, it said it would carry out a formal check-up on the way that banks treat their personal current account customers.
It threatened to refer the industry to the Competition Commission for a full enquiry unless it found evidence that banks were making it easier for people to switch accounts and to understand their overdraft charges.