Competition brings cheaper??banking

2014-06-22 15:00

By making the Easy Account widely available, FNB has become the first real competitor to Capitec’s low-cost, no-fuss banking, writes Maya Fisher-French

Five years ago First National Bank (FNB) introduced the Easy Account, which was at the time a clear response to Capitec’s simple and inexpensive approach to banking. It was no coincidence that the fees were similar but just a smidgen lower than Capitec’s.

The 2013 Solidarity Bank Charges Report stated that “FNB’s Easy Account is the only account that can compete on costs with Capitec’s Global One account”.

Like Capitec’s branches, transactions were all done online, allowing for a paperless, low-cost environment, and the pricing was competitive and simple to understand. The problem was that FNB’s Easy Account was only available at specific Easy branches and aimed predominately at low-income earners with only people earning R100?000 or less a year qualifying for the account.

FNB has now made the Easy Account available at all branches, making it a very viable option for anyone looking for cost-effective banking. According to the Solidarity report, Easy Account came in R15 cheaper than Capitec, based on a banking profile of 17 transactions.

For a monthly fee of R4.95, all electronic transactions done through an FNB ATM or using cellphone or internet banking are free. This includes in-store card purchases, as well as transfers and balance enquires.

Easy Account customers also receive free inContact SMS notifications advising them of transactions going through their accounts.

FNB has added a linked Savings Pocket account, which offers a competitive interest rate of up to 4.85%, depending on the balance in your account.

So should FNB customers be switching to this low-cost offering? It all depends on the amount and kind of transactions you do per month.

As the Easy Account was historically aimed at lower-income earners, the Solidarity report only priced it for 17 transactions.

Like any pay-as-you-use account, the more you transact, the more expensive it becomes. Based on a selection of 24 transactions, the FNB Smart Account unlimited option, which includes more free transactions in the monthly fee, starts to become more cost effective.

If many of your transactions are debit orders or electronic funds transfers, then an FNB Smart Account may make more financial sense. It is worth mentioning that a returned debit order on a Smart Account is R60 compared with R5 on Easy Account.

When you select an account, you must assess your banking behaviour to see how the pricing compares. Neither the FNB Smart Account nor the Easy Account offer eBucks rewards or an overdraft facility. To receive eBucks or an overdraft, you would have to opt for the FNB Gold Cheque account with a fee of R100 a month.

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