Guiding consumers since 2009

Absa, Standard raise their cost of banking

By Staff Writer

From Personal Finance

January 19, 2008

By Neesa Moodley-isaacs

If you bank at Absa, the average increase in bank charges across the board
is 4.2 percent.

Standard Bank customers will see an average price increase of 4.65 percent
across the board. 

Time for a Change?

Absa's new changes
The good news from Absa is that the monthly subscription fees (R19.95) for
telephone banking and the fees for airtime top-up transactions at R3 a
transaction have been scrapped.

Internet banking costs remain at R19.95 a month and cash deposit fees are
unchanged for all account types across the board.

Janet Johnston, Absa's general manager of product and pricing, says cheque
fees have been increased to encourage customers to switch to more convenient and safer transaction methods, such as internet banking, telephone banking or cellphone banking, which are also significantly cheaper.

"Cash-deposit fees for small businesses, for instance, remain unchanged for
the second year running, while Mzansi customers will only pay 13c more for each transaction for ATM cash withdrawals and 25c more a transaction for external debit orders," says Johnston

"Absa will continue to provide Mzansi customers with two free balance inquiries
a month, and will still levy no charge for rejected ATM, Saswitch or point of
sale transactions," she says.

The new cash withdrawal fees at ATMs are R3 for the first R100 you withdraw,
and 95c for every R100 withdrawn thereafter.

There is no cap on the new cash withdrawal fees.

Over-the-counter cash deposits remain at R8 a transaction, with one free deposit a month. The costs of processing your internal debit orders and stop orders are also unchanged.

You can call Absa's dedicated price line on 0860 109 136 if you have any queries.

Standard bank Increases
Sim Tshabalala, Standard Bank's chief executive for personal and business banking, says the past year has been a challenging one for the banking industry, with the Competition Commission inquiry into bank fees and the full implementation of the National Credit Act (NCA).

If you opened a home loan with Standard Bank in 2007, you would have paid an initiation fee of R199.50 for a home loan up to R500 000 and an initiation fee of R1 300 for a home loan of more than R500 000.

However, if you open a home loan with Standard Bankthis year, you now pay an initiation fee of R750 for a home loan up to R500 000. A home loan greater than R500 000 costs R1 000 plus 0.4 percent of the value of your home loan up to a maximum of R5 700 in initiation fees.

The increase in the initiation fee can be attributed to the NCA, which was
implemented in June last year.

Standard Bank customers using a Classic, Achiever, Elite or Prestige current
account now pay R22 a month for internet banking, up from R21 a month last year.

All air time top-up transactions remain free of charge. 

If you are an Mzansi account holder at Standard Bank, your first two debit orders to another Standard Bank account in your name, such as a home loan or vehicle finance loan, are free and any others cost you R4.30.

Mzansi customers pay 10c more, or R4.30, for the first five debit orders to another Standard Bank customer or an account outside of Standard Bank. After the first five such debit orders, the fee increases to R8.60 a debit.

A cash withdrawal at an ATM costs current account holders 0.95 percent of the
transaction, capped at R3.25 and electronic inter-account transfers now cost you R3.25, which is up from R3.10 last year.

Current account holders now pay a penalty fee of R85 if they exceed their overdraft limit without prior authorisation and pay a penalty of R105 for dishonoured or unpaid debits.

The minimum monthly service fees on current accounts have been increased by R5 to R40 for a Classic account, R50 for an Achiever account and R65 for an Elite or Prestige account.

A garage card linked to your credit card or current account costs you R93, while a stand-alone garage card costs you R105 a year.

Annual credit card fees are now R140 for the Blue and Achiever credit cards; R225 for Gold and British Airways Gold credit cards; and R425 for Platinum and British Airways Platinum credit cards. All secondary credit cards are free.

Keith Fuller, Standard Bank's director for banking products, says 75 percent of the bank's personal account customers have opted to use bundled products.

"Depending on your monthly banking requirements, a bundled product could save you between 39 percent and 52 percent a year in annual bank charges," he says.

Smart banking
Some of the things you can do to reduce the bank fees you pay are quite simple. The first step is to draw up a budget so that you know exactly how you spend your money each month. Include bank fees as an expense item.

You should use your budget to estimate how much cash you need for the month so that you make fewer withdrawals.

Sign up for an SMS-notification service, which is now available at most banks, so that you are always aware of the balance available in your account and you can avoid being overdrawn.

Set up your debit orders to be paid a day or two after your salary is paid into your account so that you avoid spending money before your debits go off and also reduce the risk of a returned payment in the event that your salary is paid late.

Wherever possible, use electronic banking services, such as telephone banking, internet banking, cellphone banking or an ATM.

Fees are lower for electronic banking as this is cheaper for the bank and is
generally considered to be a safer method of transacting.

Get into the habit of making all payments with your debit card so that you do not have to draw cash regularly from your bank.

Finally, speak to a banking consultant about which account best suits your banking profile.
 

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