Watch those banking costs

2010-09-11 13:29

Last week we discussed Malcolm, a 27-year-old programmer who faced a debt crisis and was clocking up high banking fees.

What usually happens is that a person opens their first bank ­account as a savings account but then they gain employment and their banking transactions ­increase.

So they end up using an ­account designed for savings as their ­primary transaction account.

These savings accounts offer higher interest rates but also ­higher fees to discourage withdrawals.

It is therefore wiser to move to a transaction-based account. If you are doing more than 10 ­transactions per month you may find it cheaper to choose a ­“bundled” plan where your transactions are covered by a set fee.

Banks are trying to move ­customers to paperless transactions on the internet and cellphones. If you stay out of banks and avoid cheque books, your banking will be more cost ­effective.

FNB, Nedbank, Absa and Standard Bank all offer bundled options on basic transaction accounts, while Capitec ­offers a pay-as-you-use bank account. These accounts should meet most of your banking needs.

Speak to your bank about ­selecting an account that is best suited for your needs.

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