If the economic downturn is forcing you to count your pennies, one way to save is to try to reduce the costs of banking. You may even find that you can save a considerable amount by switching banks.
Some banks charge more for certain products and services than others. You should compare the fees the different banks charge for the services you tend to use the most.
The major banks have comprehensive fee guides on their websites, and websites such as www.bankmonitor.co.za, www.thinkmoney.co.za and www.justmoney.co.za make it easy to compare charges across banks.
A survey by Justmoney this month showed that 42 percent of the respondents paid more than R200 in bank charges each month.
Andy Gilder, Justmoney's general manager, says the high charges bank clients pay are as much a result of consumer apathy as they are of the high costs of banking in South Africa.
Gilder says there is a perception that it is difficult and time-consuming to change banks.
He says some banks offer incentives to get you to join them, "like free, unlimited debit order set-ups and a far easier application process. Some have even gone so far as to offer cash incentives for opening an account".
Standard Bank, Nedbank and Absa have already implemented fee increases for this year, effective from January, March and June respectively. First National Bank (FNB) will implement its increases in July.
All four banks encourage you to bank electronically - that is, by cellphone, telephone, ATM and/or on the internet - because the charges are lower.
However, if you use electronic banking channels such as the internet or a cellphone, be aware of phishing scams in which fraudsters try to gain access to your accounts by getting you to reveal your access codes and passwords.
Absa
Absa, the country's largest bank, increased its fees twice last year and increased its fees again on June 1.
Keith McIvor, the managing executive for Absa's transactions and deposits cluster, says 2007 saw the introduction of the National Credit Act, and local and global economic conditions in 2008 were highly volatile.
McIvor says these factors led Absa to implement two fee increases: in January 2008, in line with the bank's financial year-end, and in September 2008.
According to McIvor, the third set of increases was a result of "market dynamics, operating conditions and customer banking behaviour".
The effect of the new price increases is an average increase of five percent for customers who bank using traditional channels, such as over-the-counter.
If you have an Absa credit card, your annual service fee increased between six and nine percent.
If you withdraw cash from your Absa credit card account at an ATM overseas, you will pay a fee of R40, up from R30 in September last year.
The monthly service fees for Silver, Gold and Platinum current accounts remain unchanged at R30.
First National Bank
FNB will increase its fees by an average of 6.7 percent on July 1.
James Fowle, the head of pricing at FNB, says banks are exposed to unavoidable cost increases, such as in electricity and salaries.
In October 2007, FNB introduced a fixed monthly fee on its personal cheque accounts for unlimited transactions, excluding cheques, branch and Saswitch transactions.
These fees on the "unlimited banking" option will increase as follows:
- Smart account - from R66 to R69;
- Silver account - from R66 to R79;
- Gold account - from R66 to R84; and
- Platinum account - from R66 to R89.
The monthly fee does not include overdraft charges, which range from 11 percent (prime) to 19 percent (prime plus eight percent).
Nedbank
Nedbank increased its fees in March by an average of 8.5 percent. The bank's next fee increase will be in January next year.
The fee increases were as follows:
- Cheque card service fees - from R115 to R125; and
- External debit orders - from R9.50 to R10.25.
The increases for annual service fees for credit cards ranged between 3.4 percent and 15.8 percent.
The cost of interaccount transfers from your credit card increased from R3 to R3.25.
Standard Bank
Standard Bank increased its bank fees in January by an average of 8.7 percent.
If you have chosen the monthly fixed-fee option on your transaction account, the fees increases are:
- Classic - from R80 to R87;
- Achiever - from R120 to R131; and
- Elite - from R145 to R158.
If you have chosen the pay-as-you-transact fee option on your transaction account, certain fees have increased as follows:
- Cheque payments - from R50 to R55; and
- Dishonoured or unpaid items - from R105 to R115.
The increase in Standard Bank's annual credit card fees ranged from 8.8 percent to 9.4 percent.
Minimise your banking costs
Bank fees are largely unavoidable, but you can take some steps to make sure you pay the least fees necessary.
Credit cards
- Stay within your credit limit so that you don't incur "over the limit" charges;
- You are charged a fee if you deposit cash into your credit card account, so rather transfer the money electronically (debit order, the internet or ATM);
- Remember, you are charged interest from the day you draw cash from a credit card - no interest-free period applies; and
- If you pay the total outstanding balance on your credit card each month, you receive the benefit of interest-free credit for up to 57 days.
Transaction accounts
- Reduce your cash withdrawal fees by working out how much cash you need each week or month and withdrawing fewer but larger amounts; and
- Use your own bank's ATMs as much as possible to avoid high Saswitch fees.