Investing & Money
piece written on the 10th June 2014 by  

There’s been a huge amount of buzz lately on the Internet about bank charges. This all started last week when everyone received FNB’s revised fee structure and realised that there were a number of changes that are going to see us paying more bank charges than ever before. In a world where technology is the driving force, one would have hoped that efficiencies through technology would assist with reducing the costs not increasing them.

I think the strangest thing I read was written by a Moneyweb journalist, Hilton Tarrant. Take a read of this scenario:

  1. A transfer of money from one of your accounts to another of your accounts (ie. from own account to own account) via online banking or an ATM it’s free. However, if you do so via the app or USSD it’ll cost you R3,50 a go.
  2. A transfer of money from your account to someone else’s account via online banking it will cost you R7 a go, but if you do the transfer via mobile banking or the app it’ll cost you nothing.

Yes, you read that right! What the heck?!

Business Tech published some fantastic fee tables:

2014 Account Fees

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2014 Withdrawl Fees

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ATM Withdrawl Comparisons

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Here are a couple of the other things that were noted:

  1. Buying prepaid airtime via FNB will now cost you R1,10 per purchase, that applies even if you’re on an unlimited transactions package.
  2. There is no longer an FNB Fee Saver rebate option for new FNB customers.
  3. If you forget your online banking password it’ll cost you R55.
  4. Getting bank statements printed at your branch will cost you R13 per page.

Absolutely crazy, no matter what you want to do, FNB will have a way to get more from you.

For me, the biggest thing to come from reading over the fee structures was that of debit order fees. FNB charges R16 a debit order! This in comparison to R15 with ABSA, R13 with Nedbank, R12 with Standard Bank and just R3.20 with Capitec. If Capitec are able to handle debit orders for just R3.20, then the other banks are surely taking us for a bit of a ride? I probably have about 10 debit orders each month, possibly even a few more than that – that means I’m incurring upwards of R160/month in bank charges!

Right now FNB’s motto is, “How Can We Help?” – Reduce your fees and you’ll be helping!

If you’re an FNB customer or interested in moving to FNB, here are the links to their pricing guides:

It’s a really good idea to have a quick read of the guide. If you’re just interested in your personal banking costs, click the Personal Banking link in the bullet points above, let it open and then find your banking account type. Below that you’ll see the tables with the costs – by just reading over it once I can assure you that you’ll spot something that’s going to save you money, even if it’s a painful reminder of how much you pay to withdraw cash from one of those carefully and cleverly positioned International ATM machines.

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  • Handy Tipper

    Thanks for this info… Capitec is looking more and more appealing to me… and FNB less and less…

  • I saw a comment on another website that said, “FNB is great for digital, Capitec is great for real-life” and I think he had a very valid point.

  • CTN

    I ditched Nedbank for Capitec years ago. At Nedbank, they would refuse to pay a debit order, even if funds to cover it came in the same day! They would juggle the transactions to show the outgoing went out first, making an unauthorised overdraft to justify them declining to pay. Then levy a R90 honour fee for the refused payment. The first time this happened, I queried it and they reversed the charge. A few years later it happened again because of a glitch with their system and they refused to reverse the R90 fee. At that point, I just switched banks and abandoned the Nedbank account. I will never settle it. I have banked with STD bank and ABSA, both useless. Only capitec has proven to be totally awesome. It’s not just the low fees, its the great service you get. If you switch, you won’t regret it.

  • Thank you so much for leaving a comment, it’s really useful hearing from someone who has actually banked at a number of the banks and is able to give an informed opinion. The more I read, the more I see people praising Capitec. My only fear is that when Capitec grows, we could well experience similar changes and problems from their side – almost the inevitable result of growth. I guess we’ll see though, it’s unfair to make assumptions about them and people should be deciding against how they are NOW, not what could be.

    I’m very much deep in it with FNB as I have about 7 accounts with them, to transfer all of those would be quite a nightmare so I’m going to monitor things really closely and see what my charges are like each month and then make a decision.

  • CTN

    Capitec can’t handle all your business. For instance, they don’t offer business accounts (as far as I am aware – but check to make sure), nor home loans. So some accounts you won’t be able to move.

    However, what you could do is simply open a personal account with capitec. They give you a mastercard. Withdrawals of cash can be done at Pick n Pay and Shoprite / Checkers for R1. Withdrawal limit is R5000 per day. They will temporarily increase it to R10 000 on request for 3 days only, and you have to go into a branch to request it. I find this limit inconvenient at times. I would like to be able to draw out more cash at times, but cannot. I think the limit on spending on mastercard is R150 000 per day but you make be able to raise this.

    If you are a “high roller” and want to be able to spend a couple of million on weekend fun, capitec is not for you because of their limits. The best of course is to go into a branch and tell them what you need and see if they can meet your needs.

  • mmctza

    I used Capitec for my business for 3 years before I merged with another client. They don’t offer business accounts but you can name one of your additional savings accounts with your business name and use that, accounting wise it just runs as your loan account – never had issues with it with my accountants / year ends. Most of the time I made more in interest than I had to pay out in bank fees. It is unfortunate that their online banking is painfully crappy looking and they have no mobile app – but it’s really a great bank. They don’t do loans to self employed / directors at all (I assume because they can’t easily put garnishing orders on their salaries if debt is not paid) and their loan interest rates are in the realm of personal loans only (very high compared to vehicle finance and home loans), they also don’t have credit cards but rather a sort of “overdraft” facility for your primary account – but with Virgin Money you can get a credit card that has no monthly fees. I shifted to FNB to get a better rate on my home loan that I had with SA Homeloans, if it werent for my home loans I would still be with Capitec. They’ve been saying for a few years now they are going to intro a credit card.. so here’s hoping that comes to fruition finally and they improve their online banking interface. Luckily I’m on the FNB Fee Saver option so if I keep my minimum balance I don’t pay any fees except for stuff like proof of payment emails.

  • Jan

    On Private Clients account:

    If you maintain a credit balance of at least R100 000 in your Cheque Account throughout the month, you will NOT pay a monthly account fee. Should your balance drop below R100 000 at any time during the month, you will be charged the normal monthly account fee.

  • @AgentVladimir:disqus Is that because of interest gain or just something they have in place? I know that private / graphite account holders get a 5.25% return on a money market account so it doesn’t take too much in that account to overcome the account fees..

  • Jan

    Nope, that second paragraph is what I quoted from their pricing guide.

    For me it makes sense to keep 100k in my account in any case, I’ve combined my homeloans, savings and cheque account into a One Account, so whatever cash I keep in my one account, I pay less interest on the homeloans (effectively getting whatever interest I would’ve been paying on the homeloan) with the cash being available immediately and not paying any bank fees on the Private Clients account as the added benefit (and automatically skyrocketing to level5 ebucks, which means massive savings + 100% back on smart devices up to R500 per month)

    I don’t know if there’s magic number for Platinum Accounts where if you have that amount in your account throughout the month, you pay zero bank fees.

  • Have you weighed up whether having 100k in your cheque account is the best return? I would honestly think that having that 100k in a share portfolio would yield a far better return – at any point I literally have nothing in my cheque account as the money is in the share market. That being said, if your home loan is linked to your cheque account, 100k would certainly wipe out a good amount of interest, so that’s definitely good thinking. I’m in a different position in that regard, I have two properties, one that I rent out (so I run it at a loss) and the one that I live in, which is effectively paid off, so I guess that’s why I go the share root rather than holding it in my account; I also move money into my offshore bank account for diversity. Truth be told, I wasn’t aware of being able to join accounts, that’s a really useful piece of information – thank you for sharing, and thank you for popping onto iMod to chat! :)

    PS. Getting the eBucks game right is certainly a wicked way to tally up some nice points. Nothing like a 40% discount on flights!

  • Jan

    Let’s do the math … ignoring the ebucks benefits for now (private clients, just having the account will get you level5 in about 3 months max), let’s say we just look at the benefit of the One Account combined with a Private Clients account (One Account is just a massive overdraft that gobbles up all your debt at the same rate as your homeloan and then your interest rate slides depending on how much cash you have in the account):

    Assume the monthly fee is R300 for the Private Client account and assume there’s another fee of about R100 per homeloan account (let’s use one homeloan for the example) and let’s assume you got your homeloan at 11%
    300 x 12 => R3600 that you are saving due to having 100k in your account.
    100 x 12 => R1200 that you are saving due to merging your one homeloan account into your cheque account that now no longer attracts fees.
    Interest you save on your homeloan for leaving 100k in the account:
    100000 x 11 / 100 => R11000

    Total: 3600 + 1200 + 11000 => R15800 per year on R100000, that’s 15.8% per year, way more than inflation.

    Now if you take ebucks benefits into account, 100% back on smart devices, 15% back on pretty much everything, 40% on flights, then I think that 100k just sitting there is doing ok.

    The rest makes sense to take somewhere else …

  • Very cool of you to break it down, Jan. That’s going to be incredibly useful and interesting to a lot of people so I appreciate you taking the time to leave such a detailed comment here!