I have a bank account. It is a ‘low interest-paying current account’. I normally get only about £30/year as interest. But the bank charges for day to day transactions are quite high (which is unfair). Hence by the end of the year they might charge me £40 +/- for their services. (e.g: bank draft costs £3, withdrawing your own money costs £0.20 per cheque etc). Under these circumstances, can I use the £30 (interest) in paying them for their services, that is to say ‘giving them back their own money’?

Islam forbids interest since it is morally not justified. Therefore, a person should not in any way use the interest money even if his bank account is ‘forcibly’ credited with it.

The bank charges you have referred to are an absolutely legitimate remuneration of the various services a bank provides you. If their rates are high, it certainly does not mean that you can use money obtained from forbidden means to pay for them. Instead of using the interest money for your own self or for such purposes, it seems befitting that you give it away to the poor or in some welfare projects. This money actually belongs to the society and should accordingly be spent on its needs.