The best savings account has the lowest charges and pays the highest rate of interest, so it is important that you choose the best deal from among the bank accounts on offer. Click here to see what the major banks charge to transact on a savings account.
An important consideration when choosing a savings account is whether you will have to pay a monthly administration fee. If you can save only a small amount, such as R50, each month, paying a monthly fee will erode your savings.
A comparison of monthly administration fees charged by banks on their savings accounts shows that the monthly administration fee ranges from zero on Standard Bank's PureSave account to as high as R14.25 at Nedbank and Old Mutual Bank. However, many banks will waive the administration fee if you maintain a specified balance. This balance varies widely, from R1 000 at Absa and Standard Bank (PlusPlan account) to R5 000 at Pick'nPay Go Banking.
Transaction fees vary depending on the type of transaction (withdrawals, deposits or balance inquiries) and how you transact (at your bank's ATM, at another bank's ATM or over the counter inside the bank). Many banks offer you reduced transaction fees if you maintain a specified monthly balance in your account.
Cash withdrawals
The charges for withdrawals are usually on a sliding scale, which means that the transaction fee will vary according to the transaction amount. For instance, at Absa you pay R6.50 (or 1.3 percent of the value of the transaction) for withdrawing R500 from an ATM, but R15.50 (or one percent of the transaction value) if you withdraw R1 500. In both cases, the withdrawals are from one of the bank's own ATMs.
Capitec has the cheapest withdrawal fee of all the banks, charging a flat fee of R1.80 (using the bank's own ATM network). This means you are charged R1.80 irrespective of the amount you withdraw.
Standard Bank charges the highest fee for ATM withdrawals. For example, on its PureSave and PlusPlan accounts, it charges a fee of R9.65 for withdrawing R500 using Standard Bank's own ATM network.
You should avoid transacting over the counter inside a bank, because such transactions can cost you an arm and a leg, except if you do so at Capitec and Pick'nPay Go Banking.
Capitec will charge you R1.80 and Pick'nPay Go Banking R2 for over-the -counter withdrawals, irrespective of the transaction amount.
To make a R500-cash withdrawal over the counter, the fees that the major banks charge range from R16 at First National Bank (FNB) to R19.60 at Absa. This represents a whopping 3.9 percent on the transaction value. A R1 500 counter cash withdrawal can be as high as R28.60, which is also the amount charged by Absa.
Cash deposits
To encourage you to deposit money into your savings account, some banks allow you to make one or even two free deposits each month.
Old Mutual Bank, Nedbank and Peoples Bank give you one deposit free each month and Standard Bank gives you one free deposit at its own ATMS on its PlusPlan account and two free deposits on its PureSave account in a month.
Some banks, such as Old Mutual Bank, Pick'nPay Go Banking and Nedbank, differentiate their fees on the value of the transaction. These banks charge less if you deposit less than a certain amount. For example, at Nedbank you are charged a lower fee for deposits of R500 and less, but a minimum charge of R15 kicks in for deposits of more than R500. In such an instance, it would be cheaper to make three deposits of R500 each if you want to deposit a total of R1 500 rather than making a single deposit of R1 500.
It costs considerably less to deposit cash at an ATM than to deposit money over-the-counter inside a branch.
Balance inquiries
Keeping tabs on your money is a key requirement of any bank account and yet some banks see fit to charge you for this service, even if you use the bank's own ATMs.
Banks that do not charge for balance inquiries include Capitec, FNB and Pick'nPay Go Banking. Other banks will not charge you for balance inquiries provided you maintain a minimum balance in your account. These banks include Old Mutual Bank, Nedbank and Peoples Bank. It is worth noting that the latter three banks also charge you the highest fee - of R1.65 - for a balance inquiry if you do not maintain the minimum balance in your account.
Interest rates
Growing your money in a savings account can be quite a challenge because banks pay very little interest on savings accounts. Click here to find out the interest rates paid by South Africa's major banks.
The exception is Capitec Bank, which pays an exceptional 10 percent interest on amounts of up to R25 000 and 6.5 percent on amounts between R25 000 and R75 000.