Generally, every year, bank fees increase and we pay more for transactions such as withdrawals, deposits and debit orders. Some banks, such as Standard Bank, Absa, and Nedbank, change their fees in January, giving consumers that extra sting after the Christmas spending spree. But Capitec and FNB change their fees at the end of February (which will apply from March 1) and June (from July 1), respectively.
What can you expect in terms of fees for 2018? What’s clear is that banks are still trying to dissuade customers from dealing over the counter. So fees for transactions where you use a person to do your bidding fetch a much higher sum.
They also don’t want you dealing with cash. According to businesstech.co.za, Absa has announced the biggest increase in its transaction prices. Its withdrawal, deposit and monthly account fees have increased by around 7%.
The good news is that if you are earning a low wage, you may not pay as much in fees as middle-income earners or have your fees increased. Absa, for instance, did not increase its monthly fees for the Absa transact account (unchanged at R4.95 per month), which is for individuals earning less than R3 000 per month.
If you’re young, you may pay less too. Last year, FNB pointed out that customers under 18 have access to a fully transactional account, with no monthly fee. Youngsters from the ages of 18 to 25 will pay R10 per month, with free access to inContact, online and cellphone banking through the FNBy account.
It pays to pay attention to the costs, because even though your bank fees may not have increased for a number of years, this can change in the blink of an eye. To illustrate this point: the account fee for the FNB easy pay-as-you-use account, which has remained unchanged since July 2014, increased by 6% to R5.25 per month and the FNB easy bundle account, which remained unchanged since July 2012, increased by 8% to R53 per month.
Why it helps to compare costs
Comparing bank fees may be a cumbersome exercise, but the effort is made slightly easier by the fact that the banks publish their fees online. So if you have internet access, there is no excuse for not perusing your bank’s site to get to grips with the fees.
The easiest way to decide which bank account to go with is to compare what you get (transaction wise) with what you pay every month. If you do a few transactions, then Standard Bank’s access account, for which you pay R59 a month for two Standard Bank ATM cash withdrawals and two cash deposits per month as part of the package, could be ideal.
Not all bundles offer the same and this is where comparisons become tricky. Some offer you more free transactions in one area, but not in another. For example, with Nedbank’s savvy plus account, you get four free Nedbank ATM withdrawals per month for R106 a month. However, ATM deposits aren’t free at R30 plus R1.50 per R100 or part thereof. You have to weigh up what you do and choose an account that mirrors your habits.
If you know you make more transactions than what the bundle accounts allow, then consider going for one that allows unlimited transactions in certain categories. However, these carry a higher fee.
You may not always qualify for a certain account, as banks tailor their packages based on salaries and even age. The Nedbank savvy bundle, for instance, only applies to those who earn over R3 000 per month, while FNB’s smart save account, which charges an attractive R7 per month, is only offered to those aged 55 and over.
Before you switch, make sure you ask your own bank if they can offer you a cheaper account. Also, be wary of changing if you make use of (or rely on) other benefits. Absa’s flexi account, for example, now offers R15 000 of funeral cover free of charge. Standalone cover valued at R15 000 could set you back around R42 a month. This must be weighed up against the flexi account charge of R25 a month (previously R16 a month).
The key is to evaluate your banking habits and find an account that matches these. Alternatively, you have to change your banking behaviour so you can save money and not pay a large amount in fees every month.
- Ditch the cash: “Cash transactions such as deposits or ATM withdrawals are more expensive than electronic transactions. Rather use your card to pay for everything from your newspaper to plane tickets as it has zero transaction fees,” says Charl Nel, head of communications at Capitec Bank;
- Embrace technology: With most banks creating their own apps with which you can transact using your phone, there is no excuse not to embrace technology. “You can also send money or do payments on your phone for only R1.50, which is less than half the cost of doing a transfer in the bank,” says Nel;
- Adjust your banking habits: If there is a person helping with the transaction, chances are you are paying through the nose. Rather, use electronic banking and, if someone wants to give you cash, either keep it and spend the money as you need it, or convince them to do an electronic transfer;
- Shop around for the best deal: Do this particularly if you have a large amount deposited in your savings account. MyTreasury is an independent price comparison website that allows savers to compare options online to ensure they get the highest interest, based on their individual requirements. It’s free and provides options based on a few simple questions. According to MyTreasury, moving your cash from a call account that offers returns of 2% to a long-term fixed deposit with an interest rate of 9% for example, would double your wealth over 10 years;
- Look out for hidden costs: Scan your statement every month and highlight the charges that apply from the bank and then ask for advice on how to decrease them; and
- Loyalty pays: Or in this case – saves. If you make withdrawals, stick to using your bank’s own ATMs. Capitec, for instance, charges its customers R8.50 per withdrawal at other ATMs, but R6 if using one of theirs.