Tuesday, 3 July 2007

Are banks charging you more than they need to with bank charges?

Want to go to New York?


Bank charges make up 40 % or more of the banks revenues!

Where else in the world does an entry level employee pay more in bank charges than he does in tax?

An average person earning R2800.00 per month will pay 4 % of his income in bank charges per month. Can banks even explain what we are paying for. No explanation? Nobody I've have spoken to knows exactly what they're paying for in bank transactions because of the way banks reflect their charges and the way they structure their packages. Over and above this, are there hidden costs that we are not aware of?

In the US, it is so easy to open a bank account, and even better there are no charges involved. You receive FREE atm withdrawals, limited number of cheques, electronic funds-transfer payments, and Internet banking. Amazing!

In South Africa the average individual pays +/- R1800 on charges per annum on a normal current account. Take penalty fees for example, why are these so high? If you have an unpaid on your account due to whatever reason, you end up paying astronomical fees for this, e.g +/- R130,00. This is ridiculous as you go even further into debt. I think that these fees should be cut and rated on how well you conduct your account.

If for example you run a very good account and then suddenly have an unpaid, there should be a good reason for this and you should not be penalised. But if you have constant unpaids then they should look into this and charge you accordingly.

Lets look at Pensioners and students. These fees are beyond ridiculous, they earn peanuts as it is, why take their few pennies? I think that the banks should if they need to charge a fee for these clients, why not charge them a flat fee.

Banks claim to beware of these problems, but are they really?

Here are a few packages offered by the 4 major banks!

Silver Package:

Gross annual income (R60 000 / R120 000) - Monthly cost R99 for 25 transactions - thereafter R10 per transaction.

Gold Package:

Gross annual income (R120 000 / R300 000) - Monthly cost R139 for 35 transactions - thereafter R10 per transaction.

These packages include cash withdrawals, account payments, debit orders, electronic fund transfers etc, and only apply to Absa ATM's.

For more info you can contact your nearest Absa branch.

Silver Package: Monthly income of R60 000 or more
Gold Package: Monthly income of R140 000 or more
Platinum Package: Monthly income of R350 000 or more

Fee Manager option:

Option 1: R45 for up to 6 transactions, thereafter R9 per transaction.
Option 2: R85 for up to 12 transactions, thereafter R8 per transaction.
Option 3: R135 for up to 20 transactions, thereafter R7 per transaction.

These cover all standard transactions such as debit orders, cheques etc. and excluding mini statements, penalty fees or transactions done within the branch.

Electronic Service option:

Mandatory monthly fee of R10- plus charges capped at R75 a month.

This includes transactions as such balance inquires(electronic) prepaid purchases(electronic)etc.

Fees are capped at R75, total monthly charge for electronic transactions will be the lesser of the fees for transactions or R75.
This option does not include withdrawals from other banks only FNB, penalty fees, payments(cheques, branches, bank cheque) etc.

For more info contact your nearest FNB branch.

Everyday Account

Gross annual income R36 000 or more

Cost : R85,00 or R55,00 (if client has a Nedbank credit card and home loan paid by debit order)

This include the following: Annual cheque and garage card fees, debit orders, all statements, cheque books etc.

One free cash deposit a month, (ATM / Branch) thereafter R1,10 per R100,00 or part thereof.
One free cash withdrawal a month, (Branch) thereafter R1,10 per R100,00 or part thereof, minimum R16,00.
Four free Nedbank ATM withdrawals a month, then R7,00 a withdrawal.

This option does not include transactions from other banks, cheques issued, penalty fees.

Everyday Account

Same option as above except that this package will cost you R42 000 annually.

For more info you can contact your nearest Nedbank or Old Mutual branch.


Gross annual income R36 000 or more

Cost: R110

Includes: 10 cheques, 8 Std bank cash withdrawals, 3 branch withdrawals, 2 ATM cash deposits, 20 electronic transactions (debit orders, stop orders, electronic inter-account transfers, account payments) 20 Mastercard cheque card purchases, unlimited balance inquires, mini statements and prepaid top-ups via electronic channels. Annual cheque card fee and Internet banking subscription fee.

This excludes any transactions from other banks and all other fees not listed above.

For more info contact your nearest Standard bank branch.

As the country's major banks announce their revised bank charges for the new year, it is a good time to re-evaluate how much you pay in on bank charges per month and where you can get the most value for your money, and of course the best service.

The key to choosing the best option for yourself lies in whether you will exceed the set number of transactions and, if so what the cost of the additional transactions will be and whether you will need to do other transactions that are not available in the specific package and what the additional cost will be thereafter.

Also remember that if a package fee includes you having a home loan with that specific bank you need to weigh up the pros and con's of saving a few rand on the packages they offer you or taking up another banks package, spending a bit more on bank charges, but saving more on your home loan.

So Remember it is up to you to make your money work for you.


Some Good reference sites for this artcile are:

Bankmonitor South Africa
Bank Comparison Site

Search for the Cheapest Flights


Anonymous said...


Thats a brillian bit of info

thanks keep them coming

Ill send this to everyone

Your secret admirer!!!Broke but beautiful

Anonymous said...

Hi Secret Admirer

You are so suave!!!

Anonymous said...

that is frightening.

www.bankmonitor.co.za said...

Check out www.bankmonitor.co.za

Anonymous said...

I couldnt agree with you more....in fact i have noticed a sudden increase chatter on various SA blogs about how the SA Banks are ripping us off.

Doing some further web searching on this subject i came across a rather excellent website that looks to be taking the SA banks head on.

Its www.comparizone.co.za. These guys look to be finally taking the complexity of understanding banking charges. They have this cool cost calculator that allows you to work out what you are paying for banking charges and then compare your spending profile to other banking products on the market...and its free!

U can even browse ratings based on service, rewards programs, etc. Brilliant!

Good luck to these guys!