Reviewing your bank account for 2014 could be a smart way to save money and make your finances work for you. According to Innocent Hlungwani, CFO of Smart Transactional Banking, when most people think about their bank account they think it is a necessary means to get money in and out.
“But by choosing the right account, investigating what you get with this account and banking smartly, you may end up saving,” said Hlungwani.
Make ‘friends’ with your account
“There are many different types of bank accounts, and if you don’t know what yours is, or what it allows you to do, this should be the first thing that you find out. How you use your money is directly linked to the bank account you should have,” explained Hlungwani.
If you hardly use your account a ‘pay as you go’ account with low monthly fees but with charges for each transaction may be suitable. However, if you transact regularly, FNB offers the Unlimited Account where you do not pay per transaction but a monthly fee. This allows you to budget for your banking costs on a monthly basis.
What does your bank account give you?
According to the Banking Association of South Africa (Basa) there is product and pricing complexity in that banks appear to offer the same set of account holding and transaction facilities but these facilities are bundled, packaged and priced differently.
“Banking isn’t just all about bank fees, some banks will often reward or give value adds to customers to incentivise them to continue banking with them, and to bank in a cost effective way,” said Hlungwani.
He added that you should make sure that the rewards system works for you check what your bank is offering you in terms of rewards. “Rewards can really work for you, if you understand the rewards program and if you use your bank account cleverly and efficiently you will be able to not just save money, but actually get some back,” said Hlungwani.
Use electronic and digital services
Check to see what electronic or digital services your bank account offers. Most transactions are cheaper if you use cellphone or online banking, or one of the other digital options such depositing money at an Automatic Deposit Teller (ADT) instead of inside the branch.
“Regular services such as making a payment to a person or accessing an account statement are very cheap if not free when using electronic or digital services. The reason it is much cheaper is that everything in a banking branch costs money, therefore if you use cellphone banking, online banking or an ADT, you are saving the bank money and so the bank is able pass these savings onto you.”
Another example of the convenience of online banking is with Nedbank’s internet banking. With their “Approve-it” technology, you get to make tax payments to Sars, set up recurring payments and transfers and have access to your current account instantly.
Cash isn’t king
Hlungwani said that while it might seem to make sense to withdraw cash from your account to make payments said it is not the best way to use your bank account.
“Not only is carrying cash arounda problem from a safety point of view, you can also quickly rack up you bank fees if you are drawing cash frequently, and these fees are especially high if you withdraw from another bank’s ATM.”
Most stores now carry a Point-of-Sale machine, which will allow you to swipe your card when you purchase stuff in the store instead of paying with cash. One can also draw cash at these Point-of-Sale machines in these stores.
“If you need to withdraw money, rather do it for small items only, such as taxi fares and street vendors. For everything else, swipe,” said Hlungwani.