You can’t compare bank charges

2012-02-11 10:14

As we researched this article, both Absa and FNB competed to have the cheapest bank account.

Absa gave us figures showing that, based on 17 transactions, they were the cheapest at R29.15 a month compared with the same set of transactions for which an FNB EasyPay customer would pay R34.15.

FNB responded by showing us their basket of transactions in which an EasyPay customer would pay R29.25, while an Absa Transact client would pay R39.60. No wonder it is difficult for a customer to fully compare bank charges!

It comes down to what each bank selected as their 17 transactions and as a customer you need to decide what transactions you typically use.
For example, Absa included a monthly mobile banking fee, which is free to Absa Transact customers but for which FNB EasyPay customers will pay R8. Airtime top-ups are free at Absa, while FNB charges R1 a top-up.

So if you want to use mobile banking and buy airtime frequently, then Absa Transact is the better option.
FNB’s transaction basket includes a once-a-month cash withdrawal from another bank’s ATM, for which FNB EasyPlan charges R7.70 for R500 while Absa Transact clients pay R14.45. FNB also included obtaining a statement at a branch and making a cash deposit, both of which are more expensive at Absa.

So if you know you will make a withdrawal from another bank’s ATM, and like to go into a branch to get a statement and make a cash deposit, then FNB EasyPlan could be the better option.
However, Absa has the largest ATM network in South Africa and on average their customers only make two non-Absa ATM withdrawals a year. An Absa client can also deposit cash at their cash accepter machine, which is lower than the cost of the branch deposit.

Personally, I believe both banks understate the amount of ATM withdrawals. FNB assumes you will only withdraw money three times a month, twice from a till point and once from another bank’s ATM.

It would probably be more realistic for a customer to withdraw once a month from a till point and twice a month from an FNB ATM. That pushes the monthly cost up by R5 a month.
Absa assumes two Absa ATM withdrawals, so realistically you could double that and add R7.70 to your monthly fees.

At FNB, if one of those withdrawals is at a till point, then you would only add R4.85 a month.

The real challenge was in finding all the fees. Absa, for example, cross-referenced to the Absa Flexi account for fees left out of the Absa Transact list like non-Absa ATM withdrawals. This made trying to work out the real cost difficult.

As a customer you should write down your typical monthly transactions and then ask the bank to tell you how much you are likely to pay each month.
Also find out how you can cut bank fees by changing your banking behaviour, like withdrawing cash from a till point and not depositing cash at a branch.

While trying to work out fees still remains a quagmire for clients, the fact that both banks are trying so hard to be the cheapest and to deliver banking for under R30 a month is at least a step in
the right direction.

We are looking forward to Capitec’s fee announcement next month as well as the imminent launch of Standard Bank’s inclusive banking product.

» Tell us what you think: Leave your comment below or comment on

our Facebook

page or on Twitter @City_Press

» Did you know? City Press has an iPad app. Find us in the app

store

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
0 comments
Comments have been closed for this article.

Inside News24

 
/News

Book flights

Compare, Book, Fly

Traffic Alerts
Traffic
There are new stories on the homepage. Click here to see them.
 
English
Afrikaans
isiZulu

Hello 

Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.


Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.




Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.