First National Bank (FNB) clients will pay an average of 3.8 percent more for their transactions from November 1 this year, Janet Johnston, the chief operating officer of FNB Core Banking Solutions, says.
The increase follows FNB's annual review of its charges.
( Click here for a table showing a comparison of FNB's charges in 2004/5 and 2005/6.)
The fees for some transactions will increase by 59 percent, while other transaction fees will decrease by as much as 33 percent.
For instance, cheque accountholders will see the cost of cheque payments or external debit orders below R500, increase from R6.30 to R10 (a 59 percent increase). On the other hand, electronic account payments on amounts between R500 and R1 000 will drop from R6 to R4 (a 33 percent decrease).
(An external debit order is one made in favour of a beneficiary outside the FNB group and therefore excludes those to Wesbank, FNB Homeloans, FNB Card, FNB Loans and FNB funeral policies.)
No change
The fees for the following transactions will remain unchanged on November 1: cash deposits (using any channel); withdrawing cash over the counter at an FNB branch; buying prepaid cellular airtime and electricity; and purchases made with a Visa Electron debit card.
FNB will continue not to charge a subscription fee for telephone, cellphone and internet banking.
Johnston says FNB is still the only bank in South Africa to offer free balance inquiries at an ATM.
FNB's transaction alert service, inContact, will also remain free. Clients who register for inContact receive alerts on their cellphone or via email either every time a transaction is performed from their account or when only certain transactions are performed.
Your monthly charges
Whether your monthly bank charges will increase or decrease from November 1 will depend on how you bank (for example, at an ATM or over-the-counter), the number of transactions you perform, the type of transactions you perform and their value.
Johnston says most clients should be able to decrease their bank charges if they choose the most appropriate pricing option and bank smartly.
She says banking smartly means using the more cost-effective electronic channels, such as an ATM, a telephone or a cellphone, debit and stop orders, and making purchases using a cheque or debit card.
Cheque accountholders can reduce their fees to R85 - or even R45 - a month if they opt for the bank's fixed-fee option, Johnston says.
Clients with a Smart account can reduce their monthly fees to R25, Johnston says.
A Smart account is FNB's combination transmission and savings account that enables you to perform six free transactions a month.
Go electronic
Based on the average number, type and value of the transactions performed each month by an FNB cheque accountholder, an analysis of the new fee structure shows that the client's monthly fees will fall by almost seven percent, from R133.06 to R124.33.
If that cheque accountholder is prepared to switch from the pay-as-you-go pricing option to the cheaper electronic pricing option, he or she could reduce his or her monthly fees by 36 percent, from R133.06 to R85, when the new fee structure takes effect.
The charges for electronic banking are cheaper for two reasons. Firstly, it costs less for FNB to operate technology-based channels, and the bank passes these cost-savings on to its clients, Johnson says. Secondly, in August this year, FNB reduced the cap (maximum fee) that applies to its electronic pricing option from R90 to R75 (excluding the R10 monthly fee).
Simpler fee structure
Johnston says in line with FNB's strategy of simplifying its charges, the bank further streamlined certain charges on its cheque and Smart accounts this year.
FNB's aim is to eventually charge a flat fee for each transaction instead of tiered, or banded, fees.
Simpler fee structures will apply to the following transactions from November 1:
- Cheque payments, external debit orders and electronic account payments on the pay-as-you-go pricing option. The current triple-band pricing structure will be reduced to two bands: one for transactions up to R1 000 and one for transactions more than R1 000.
Cheque payments and external debit orders will cost R10 for transactions up to R1 000 and R20 for transactions over R1 000. The fee for account payments will depend on the band and the channel you use. If you use electronic channels , you will pay R4 for transactions up to R1 000 and R8 for transactions over R1 000.
However, if you choose to use a branch or agent-assisted telephone banking, you will pay R10 for transactions up to R1 000 or R20 for transactions over R1 000.
- The fees for withdrawing cash from an ATM (either an FNB ATM or that of another bank) will be based on a banded structure instead of a basic fee plus a percentage of the value of the transaction.
The current fee for withdrawing cash at an FNB ATM is R2.30 plus 0.95 percent of the value of the transaction. From November 1, you will pay R5 for withdrawing amounts up to R500, R10 for withdrawing between R500 and R1 000, and R15 for drawing more than R1 000.
The effect of the new banded fee structure is that a R500 withdrawal will cost you R5, which is R2.05 less than the current fee, and a R1 000 withdrawal will cost you R10, which is R1.80 lower than the current fee.
Your pricing options
First National Bank clients with cheque or Smart accounts can choose one of four pricing options:
- Fee Manager.
You pay a fixed fee for a set number of transactions a month. If you have a cheque account, you pay R45 to perform six transactions, R85 for 12 transactions and R135 for 20 transactions a month. If you have a Smart account, you pay R25 for four transactions, R40 for eight transactions and R55 for 12 transactions a month.
- Fee Saver.
If you maintain a balance in your cheque account of R8 000 during the month, you can perform 35 transactions free each month. If you have a Smart account, you need to maintain a balance of R6 000 to qualify for 10 free transactions a month.
- Electronic banking.
You may only bank using electronic channels. This means the internet, ATMs, a cellphone, a telephone, stop and debit orders, as well as purchases using a cheque card and debit card.
You pay R1.50 or R3 or R6 for each transaction, depending on the type, subject to the cap. The maximum monthly charge you will pay is R85 (R75 cap plus a R10 monthly fee). You may pay less, depending on the number and type of transactions you perform in a month.
With the above three pricing options, additional charges apply to: cash deposits (over-the-counter and ATM), mini statements, transactions using other banks' ATMs, over-the-counter balance inquiries and over-the-counter cash withdrawals.
- Pay-as-you-use.
You pay a fee for each transaction that you perform.