The cost of banking for cheque accountholders at Standard Bank will increase by an average of 3.1 percent and savings accountholders will pay an average of 1.6 percent more next year. Standard Bank will implement its next annual fee adjustment on January 1, 2006.
According to Keith Fuller, the director of transaction products at Standard Bank, from January 1, a client with a Classic cheque account will pay an average of R106.11 a month, an Achiever accountholder will pay an average of R143.76 a month and a Prestige accountholder will pay an average of R163.03 a month.
Classic, Achiever and Prestige are three of Standard Bank's cheque account packages. These average monthly fees are based on the bank's pay-as-you-transact fee option.
The effect of the new pricing structure on each client will depend on the type of account he or she operates, how the client transacts (that is, at an ATM, over the telephone, via the internet or over the counter at a bank branch), how many transactions the client performs in a month, and the value of each transaction.
Comparison
Personal Finance examined common transactions on the Classic cheque account and the PlusPlan savings account and compared the costs you pay currently with what you will pay in the new year using an amount of R500 (see the table).
The highest increase across the range of transactions examined will apply to over-the-counter cash withdrawals, which will cost you R17, or 4.6 percent more, next year if you withdraw R500. However, you would pay a lower fee for withdrawing the same amount if you used another channel.
From January 1, Classic cheque accountholders will pay R7.50 (or a 1.4 percent increase on this year's fee) to draw R500 from a Standard Bank ATM. If you draw R500 from another bank's ATM, it will cost you R14.20 (0.7 percent more on this year's fee).
If you have a PlusPlan account, it will cost you R9.75 to draw R500 (or one percent more than you are currently paying) from a Standard Bank ATM. But drawing R500 from another bank's ATM will set you back a hefty R16.45 (0.6 percent more than you are currently paying).
From January 1, it will cost Classic accountholders 3.6 percent more to make a payment of R500 electronically, by debit card or by stop order.
The new sliding scale fee that will apply to Classic cheque accounts for electronic payments, debit card payments and stop orders will be R3 plus 0.55 percent of the value of the transaction, up to a maximum of R14.
Unpaid fees
Next year, the unpaid fee, which is the fee you are charged for a rejected cheque or debit order if you do not have enough money in your account, will be reduced from R115 to R99 for Classic cheque accounts.
Also next year, the unpaid deposit fee will be removed from all accounts. You are charged an unpaid deposit fee if the bank of a person who issues a cheque in your favour returns that cheque to you because that person does not have enough money in his or her account. Currently, this fee is R2.90 plus 1.1 percent of the transaction value, to a maximum of R26.
However, the overlimit fee, which is charged when you make withdrawals that exceed your balance or overdraft on a cheque account, will increase from R50 to R79. This is an increase of 58 percent, so it is in your interests to monitor deposits into and payments from your account.
Some charges will not change in 2006. These include the monthly subscription fee of R21 for internet banking and the homeloan administration fee of R5.70 for loans below R500 000 and R22.80 for loans above R500 000. You can make use of internet and telephone banking with either a cheque or a savings account.
Mzansi
The cost of transacting using a Standard Bank Mzansi account will increase by an average of 1.25 percent next year.
The Mzansi account is aimed at low- income earners or people with an irregular income.
Fees will increase for the following transactions: cheque deposits, which will increase from R4 to R4.05; cash withdrawals from Standard Bank or another bank's ATM, which will increase from R4 to R4.05; and over-the-counter cash withdrawals, which will increase from R8 to R8.10.
What a basic cheque account at Standard Bank will cost you
Standard Bank has created two fictitious accountholders to illustrate how its new fee structure will affect clients who are above-average and below-average transactors.
The bank says a low transactor, whom the Standard Bank regards as someone who performs 12 transactions a month, will pay R78.50, or 1.8 percent more, each month when the increases take effect on January 1 next year.
This total monthly cost is based on the following assumptions: the client has a salary of R6 000 deposited electronically into his or her Classic cheque account; makes four ATM cash withdrawals of R550; issues one cheque for R750; pays rent of R1 200 electronically; has two debit orders of R500; and makes two cheque card purchases of R250.
Standard Bank says a high transactor, whom the bank regards as a client who performs 36 transactions a month, will be charged R233.30, or 1.66 percent more, each month.
This total monthly cost is based on the following assumptions: the client has a salary of R22 000 paid electronically into his or her Classic cheque account; makes one R500 cash deposit; makes eight ATM cash withdrawals of R550 each; issues four cheques of R1 200 each; pays a mortgage bond (at Standard Bank) of R1 200 via debit order; makes a R4 000 car instalment (to Standard Bank) via debit order; has six more debit orders of R500 each; makes two electronic account payments of R500 each; makes eight cheque card purchases of R250 each; and makes four balance inquiries.
Keith Fuller, the director of transaction products at Standard Bank, says by choosing a different pricing option, such as paying a fixed monthly fee, the low transactor can reduce his or her charges by eight percent, from R78.50 to R72, and the high transactor can reduce his or her charges up to 69 percent, from R233.30 to R72 a month.
The bank has a calculator on its website, www.standarbank.co.za, that will help you to choose the most appropriate pricing option. Click on the "fees, rates and pricing" tab on the lefthand side of the homepage and then click on "account fees 2006". At the bottom of that page, you will find a tab labelled "fees calculator". To use the calculator, you will need to list the type, number and value of the transactions that you perform on your account each month.
Pricing options
The three pricing options for holders of cheque accounts are:
- Pay-as-you-transact.
You pay a fee for each transaction. You earn interest if you maintain a positive balance in your account.
- Fixed monthly fee.
You pay a monthly fee, which includes a certain number of transactions.
However, make sure you know what transactions are included in the fixed monthly fee. The number of each type of transaction (cash withdrawals, deposits, and so on) differs depending on your account package.
On the Classic cheque account, the fixed monthly fee is R72; on Achiever, it is R105; on Elite, it is R121; and on Prestige, it is R141. Once you exceed the fixed number of transactions, the normal transaction fees apply. You earn interest if you maintain a positive balance.
- Refund option.
If you maintain a balance of at least R6 500 in your account for a full calendar month, certain transaction fees will be paid back into your account. The amount that will be refunded to you each month will depend on the balance you keep in your account:
* R6 500 to R14 999: R75;
* R15 000 to R24 999: R110;
* R25 000 to R49 999: R180;
* R50 000 to R99 999: R230; and
* R100 000 or more: R350.
Unlike the other pricing options, you do not earn interest if you maintain a positive balance in your account.