The Solidarity Bank Charges Report reckons that competition in the market for basic bank accounts is still active, while pressure of competition is keeping the cost of accounts marketed to the middle class in check.
According to the sixth annual bank charges report by the SRI, the fierce competition among basic bank accounts is particularly evident in FNB’s EasyAccount.
Paul Joubert, senior researcher at the SRI, says: “FNB has significantly reduced charges for various electronic transactions on the EasyAccount. This means that the monthly cost of the EasyAccount is now significantly lower than that of Capitec’s Global One account – even when interest on a positive balance in Capitec’s account is taken into consideration.
“Absa, with its Transact account, is also competing very well with FNB and Capitec at this level.”
In spite of the active competition at the level of basic bank accounts, Nedbank still appears “to be out of touch with this trend.”
“The bank’s Ke Yona account is about twice as expensive as its nearest rival’s account,” Joubert adds.
Regarding the accounts marketed to the middle class, only the bundle accounts from Absa, FNB, Standard Bank and Nedbank “make financial sense to the consumer, all at a cost of about R100 per month.”
Joubert says the pay-as-you-transact (PAYT) accounts are almost invariably much more expensive than R100 per month, even for someone doing very few transactions per month.
“The exception here is Capitec’s PAYT account, which is by far the cheapest among the accounts marketed to the middle class.
“Although the cost differences among the bundle accounts are minimal, there is still strong competition among the banks at this level.
“For example, where Standard Bank’s Elite Plus account last year was generally the most expensive in this group, this year it is mostly the cheapest after Capitec. This year, FNB’s Gold Unlimited account is the most expensive of the bundle accounts marketed to the middle class.”
According to the SRI, competition among these accounts is no longer based mainly on cost but rather on extras like rewards programmes.
“Clients interested in these rewards programmes should do their homework properly before deciding which bank to support. They should also take note of the fact that the terms and conditions of these programmes can change often,” Joubert says.
He advises dissatisfied bank clients not to compare the different banks but rather the specific accounts.
“It is important for consumers to find out exactly which account they have at present and what the cost of their present account is before switching to another bank or account.
Informed consumers are the best regulators of bank charges, according to the SRI.
“Bank clients who are dissatisfied with their bank charges should not simply accept them. By constantly considering alternatives, clients keep the banks on their toes.”
To read the full report, click here – https://navorsing.solidariteit.co.za/en/bank-charges-report-2015/