First National Bank (FNB) is introducing a new flat overdraft facility fee of R14 a month from June 1 for new overdraft facility users. The bank already charges its existing 330 000 personal overdraft customers an annual overdraft facility fee that, if you have a small overdraft, works out cheaper than monthly fees announced by the other big banks recently.
The annual fee is one percent of your overdraft facility, fixed at a minimum of R114. While that might be inexpensive, at R9.50 a month, an overdraft of R50 000, for example, would attract annual charges of R500, or R42 a month.
The new overdraft facility fee for small businesses has not yet been decided.
Other banks
FNB's rival, Standard Bank, came under fire earlier this year when it implemented a monthly overdraft facility fee of R17.50 a month.
The huge outcry was precipitated by the fact that a number of Standard Bank customers were informed of the changes after the first charge had already been debited, and many were unaware that they had access to an overdraft facility in the first place.
The bank eventually agreed to reverse the fee for customers who indicated by March 31 that they did not want an overdraft.
Absa will start charging a monthly overdraft facility fee of R15 from May 1.
Nedbank has introduced a tiered fee structure, ranging from R5 to R50 a month. It will start charging this fee from the end of July.
Saks Ntombela, the managing director of transactional products at Nedbank, says this is to give customers a chance to decide if they want to either reduce or cancel their personal overdraft facility.
The banks have indicated that they have to charge these fees in order to meet the costs of holding capital for an overdraft facility.
According to the Basel II Accord, an international banking regulation that the Reserve Bank has asked local banks to adhere to, banks are required to hold capital against approved credit facilities.
National credit act
From June 1, when the final stages of the National Credit Act are implemented, the monthly overdraft facility fee charged by banks will be capped at a maximum of R50. Banks will also be restricted to an initiation fee, a monthly facility fee and interest on the overdraft facility used.
FNB's other fee changes, announced this week, are geared towards encouraging customers to use electronic banking options such as ATM transactions, and cellphone, online and telephone banking in order to reduce costs as well as fraud.
Customers are also encouraged to use the bank's free SMS InContact service, which informs them via SMS whenever a transaction has taken place on their accounts.
This service has been found to reduce incidents of fraud and alerts the bank to fraudulent transactions in real time, James Fowle, FNB's pricing executive, says.
Branch increases
In line with its strategy to move customers from branches and on to electronic platforms, FNB has increased the cost of branch cash withdrawals from R16 plus one percent of the amount withdrawn to R18 plus 1.05 percent. Cash deposits at a branch will set you back by R2.60 plus 1.05 percent of the deposit compared with the previous charge of R2.50 plus one percent.
Annual credit card fees across the board have been reduced to R99 if you choose the electronic service option (ESO). This requires you to pay your credit card account either by debit order, ATM transfer, online banking, or cellphone or telephone banking.
You would also have to agree to the bank e-mailing rather than posting your statements and to make use of the SMS InContact service. If you prefer to have your statements posted, you will not qualify for the ESO and will have to pay annual credit card fees of R155.
Cellphone banking
Registration for cellphone banking at FNB was previously free, with transactions costing up to R6.50 each. You will now find all transaction charges for cellphone banking have been dropped from June 1.
Unlike some of the other banks which have restricted cellphone banking to phones with a certain level of technology, FNB cellphone banking can be accessed through a simple SMS format. Other fees that have been dropped completely include those for telephone banking (if you use the integrated voice response or speech banking), ATM balance enquiries, ATM cash deposits and purchases of prepaid electricity and cellphone airtime via electronic channels.
Cheques, debit orders
In the past, cheques and debit orders shared the same tiered charge of R10 for transactions between R1 and R1 000 or R20 for transactions of more than R1 000. However, because debit orders are cheaper than cheque transactions, the bank has introduced separate charges for these two services.
You will now pay R12 for each external debit order (to an account held at another bank) and R18 for cheques. The monthly fee on a cheque account increases from R11 to R13.50, unless you are on the ESO, in which case it will cost you R10.