Bank charges have risen by as much as 46 percent over the past year, the latest research into transaction charges by Personal Finance and Bankmonitor.co.za shows.
The research compares current fees on common transactions on the big banks' basic cheque accounts with what they were in July last year. Bankmonitor.co.za is part of Infochoice, an online provider of comparative data on financial products.
The fee that has increased by the most across the banks surveyed was for an over-the-counter cash withdrawal at Absa. Absa increased this fee by 46 percent from R15 in July last year to R22. Note that you are charged this fee irrespective of the amount that you draw.
Despite Absa's high fee for counter cash withdrawals, it is not the most expensive bank for this transaction. Nedbank and Permanent Bank charge R24.30 for a withdrawal of R300. Standard Bank charges R19.75 and First National Bank (FNB) charges R6.70 for a R300 withdrawal.
For years, banks have been trying to get you to use electronic methods to do your banking rather than a teller inside the bank. To push you to do so, banks have slapped big transaction fees on counter transactions.
Tough increases on minimum monthly fees are more of a surprise. You pay these fees if your transaction charges (or in Absa's case, your cheques fees) are less than these minimums. If your charges are more than these amounts, the actual charges apply. Absa has increased its minimum monthly fee on its Silver cheque account by 39 percent to R25, while FNB has increased its fee by 34 percent to R18. Nedbank, Permanent Bank and Standard Bank also charge a minimum monthly fee of R25.
ATM withdrawals
Cash withdrawals at ATMs have gone up by between three and eight percent across five of the big banks. Absa increased its fee on a withdrawal of R300 from its own ATM by seven percent to R4, FNB by seven percent to R3.90, Nedbank and Permanent Bank by three percent to R4.83, and Standard Bank by eight percent to R4.15.
Bear in mind that cash withdrawal fees, as well as several other bank charges, are based on a sliding scale fee in which you are charged a certain amount for the first R100 you withdraw and another amount for every further R100. Some fee scales include maximums. It is noteworthy that Absa, on its cash withdrawal formula has dropped the maximum of R15 that applied last year.
If you drew R2 000 from an Absa ATM last year, you would have been charged the maximum of R15. Now, however, you are charged R19.30 because there is no maximum. From now, the more you draw, the higher the fee will be.
Withdrawing money from an ATM that is not part of your bank's own network (that is, a Saswitch ATM) is expensive and should be avoided.
For instance, while drawing R300 from an Absa ATM will cost you R4, using a Saswitch ATM will cost you R9, more than double the amount. The same applies to the other banks.
Saswitch transactions this year compared to last July increased by three percent at Absa and seven percent at FNB and Standard Bank.
Balance inquiries
Next to withdrawals, balance inquiries are probably the next most common transactions. After all, everybody should be keeping tabs on the amount of money in their accounts, if not for budgeting purposes, you need to do so to avoid penalty fees. Penalty fees apply if, for instance, a debit order goes off your account and you do not have enough funds in your account.
On balance inquiries, Nedbank and Permanent Bank are the most expensive, charging R1.65 for each transaction. Balance inquiries at FNB and Standard Bank are free and Absa introduced a new fee of R1 for every inquiry in April this year.
It costs you more to make a balance inquiry from a Saswitch ATM than from your bank's own ATMs. Standard Bank has increased its Saswitch fee by 25 percent to R2.50, FNB by 10 percent to R2.70, and Absa by eight percent to R2.70.
Statements
Nedbank and Permanent Bank implemented large increases of 29 percent in their fees for statements obtained from inside the bank.
At R4 a statement, Absa is now charging 14 percent more and Standard Bank charges R4.50, or 12 percent more than it did in July last year . FNB charges R3.50 per page. Based on a single page, this amounts to 10 percent more than FNB charged clients in July last year.
The percentage increases have been calculculated on a transaction amount of R300.
Minimum monthly fees are applied if your transaction charges (or in Absa's case, your cheque fees) are less than the minimum. If your total transaction charges in a month are more than the minimum amount, you will be charged for all the transactions you did in that month.
While it may appear that some banks have not increased their fees, it is just a question of the time periods being compared.
Most banks review their fees annually, but do make adjustments in between their annual reviews as well.
Annual reviews of the big banks are done as follows:
Absa: 1 April;
FNB - 1 November;
Standard - 1 January;
Nedcor (Nedbank, Permanent, Peoples, Cape of Good Hope, Pick 'n Pay) - 1 July.
Explanations
Formula: For example "R2.70/R100+R1.40/add. R100 (max. R22)" means you will pay R2.70 for the first R100 or part thereof plus R1.40 for every additional R100, or part thereof, up to a maximum amount of R22. Where a formula applies, the percentage increase is based on an amount of R300.
Abbreviations: add. = additional; min. = minimum; max. = maximum; int. = internal (within the banking group, for example, Stannic, which provides vehicle finance, is part of the Standard Bank group); ext. = external (outside the banking group); dep. = deposits