Personal-Finance

A look at FNB's new banking costs

2017-06-07 09:40

FNB has rebranded its youth offering with the launch of FNBy, which I must admit is compelling for a parent of teenagers.

Children under the age of 18 can bank for free, except for a flat fee of R1.40 to withdraw cash at a retailer or R1.85 per R100 to withdraw at an ATM. There are no monthly fees and free card swipes.

Kids also have access to the FNB App with reward programmes and it includes free InContact messaging which can be sent to the parents so you can keep an eye on your child’s spending habits. The child can also put money into the linked savings pocket and earn 6.5% interest on balances of R100 or more, certainly better than Mum and Dad’s rate!

For students between the ages of 18 and 25, there is a monthly fee of R10, reduced from the R25 paid on the previous FNB student offering. This includes free card swipes and free withdrawals and deposits up to R3 000 per month. This account offers additional linked savings accounts such as a 32-day notice account. It includes free online and cellphone banking.

This is an attractive offering but the catch is that it is only available to children whose parents bank with FNB.

ONE CREDIT FACILITY, ONE CARD

FNB is launching the Fusion Premier account which combines your credit card and cheque account into one facility with one card. The benefit is that anytime you use your card, even if you are not accessing credit, you earn eBucks based on a credit card spend rate which earns you more eBucks per swipe.

Personally, I am not sure about the real benefits, and you need to consider your banking behaviour first. Effectively, it combines the features of an overdraft facility with a credit card and you get 30 days interest free on card purchases.

Currently, overdraft facilities tend to have lower interest rates than credit cards, so find out what interest rate you will be charged; FNB’s response is that credit rates are personalised, so will depend on the client.

You will also be spending your own money before spending the credit facility, as you would with an overdraft, but that removes the full benefit of the 55-day interest-free period you receive on your credit card, which savvy banking customers use by swiping their credit cards interest-free and then settling in full at the end of the month.

By combining both your overdraft and credit card facility, it will give you a much higher overdraft availability which could mean you end up in tears if you are not keeping track of your spending.

Remember your next pay cheque would first go to pay the overdraft, whereas if you had a separate credit card you could pay it off over time. You need to think carefully about whether this offering makes sense to you.

FEE INCREASES

While Premier and Private Clients will not experience higher fees, there have been changes to the Easy and Gold accounts.

Pay-as-you-Use Easy account customers will be paying R5.25 per month, up from R4.95, for card transactions and electronic transfers, but will start to pay 40c for their InContact SMS, which seems counterintuitive as it is an important fight against crime.

Ryan Prozesky, CEO of Value Banking Solutions at FNB, says the aim is to encourage customers to migrate to the FNB App which provides payment notifications for free and which will soon have zero-rated data costs across all mobile providers.

This does assume that the customer has a smartphone, which may be an issue in the Easy segment which has smartphone penetration of around 50%.

Easy Bundle clients will be paying R53 (R4 more) per month for their bundle of services and will also have changes to ATM withdrawal limits.

Previously the bundle included free unlimited cash at till point withdrawals and four free ATM withdrawals.

This has been changed to a total cash withdrawal limit of R3 000 per month irrespective of whether you are using an ATM or till point. This will benefit clients who will find it easier to manage how much cash they withdraw in a month rather than worrying about how many transactions they have done.

Many customers do not feel comfortable carrying around large amounts of cash so the ability to withdraw smaller amounts more frequently will be a benefit.

FNB has discontinued the cash-back reward programme for Pay-as-you-Use Easy account customers. Prozesky says the take up was very low as customers did not transact sufficiently to move into tiered reward levels, however, they will be introducing a more direct reward programme linked to grocery vouchers.

Gold Unlimited customers will be spending R105 per month (R5 increase) and will be subject to a R5 000 limit for free withdrawals. FNB continues to drive electronic channels by making branch transactions eye-wateringly expensive.

For example, to deposit cash at a branch will cost you R60 plus R1.90/R100 – on R1 000 that would be R79 compared to a R9 ATM fee (or free if you have a bundled fee option).

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July 23 2017