By Angelique Ruzicka, editor, Justmoney
Have you ever reviewed your bank statement to find out how much your bank is charging you in fees for the transactions you conduct every month? Do you even know how much you are charged for withdrawing money at ATMs, conducting transfers over the counter or asking your bank’s call centre agent to send you a statement?
Banks, depending on the type of account you have, can charge for each and every transaction that you make. But there are things you can do to reduce the charges or in some cases you can even transact for free if you do it the ‘right’ way. Here are ten things you can do to reduce your bank fees now:
1. Alter your transaction habits and remember that swipes are generally free/cheaper: “Think about your usage and then go through the list and change your behaviours slightly in order to use the lowest cost option to do a specific transaction. For instance, if you draw cash every month to pay your Edgars account, rather walk over to Edgars and just pay by card. The transaction costs nothing while the ATM transaction costs you the ATM fee, plus you have to stand in two queues,” explains Charl Nel, head of communications at Capitec.
2. Keep cash withdrawals to a minimum: Withdrawing money from an ATM, if done often enough, can all add up. For example, if you opt for Absa’s sliding scale fee method of payment you will pay a R3.95 base fee for a transaction plus a R1.25 fee per R100 withdrawn. This means a R500 cash withdrawal will cost you R10.20 (R3.95 +5 x R1.25).
If you have to withdraw cash though, it’s best to make withdrawals at store till points because it’s cheaper. With FNB for example it’s free to withdraw at shop till points (such as Pick n Pay, Woolworths etc.) across all products, but Capitec charge a minimal fee of R1.05 for till point withdrawals, which is still way cheaper than their ATM withdrawal fee of R4.60.
Also, if you prefer to use an ATM still it’s best to withdraw funds from your own bank’s ATM than another. Capitec’s fee for withdrawing money from a rival bank’s ATM costs R7.30 – R2.70 more expensive than its ATM withdrawal fee.
3. Dump that cheque book: Are you still using a cheque book to pay for groceries and other bills? Well stop it now as using this method could be costing you an arm and a leg. At FNB the cost charged for issuing a cheque book costs between R40 and R60, while the bank charges your R40-43 per cheque book transaction.
Irlon Terblanche, head of value banking solutions at FNB says the bank is trying to phase out the cheque book because it's expensive and because there an increased risk of fraud using this payment method.
4. Manage your money to avoid bank penalty charges: If you don’t have any money in your account and a debit order can’t be awarded you could be charged a ‘dishonoured transaction fee’. “It depends on the product you have. For some FNB accounts you get charged R5 for a dishonoured transaction but they can be as much as R60 depending on who you bank with,” explains Terblanche.
5. Downgrade to a cheaper account: Having a gold, platinum or black card that lets you sit in exclusive airport lounges isn’t worth it if you are paying through the nose in bank fees, especially if you only fly occasionally. Yes you can switch to another bank that offers cheaper transactional banking fees but find out first if your own bank has a cheaper account that you can be transferred onto. Switching can be a hassle and you don’t have to make that change if your current bank can save you money too.
6. Look after your cards: Keep your wallet containing your bank cards in a safe place. If you lose your card you generally have to pay for a replacement card.
7. Look out for fraudulent transactions: If you have debit orders coming off your account you get charged for it. Lately, there has been a spike in the rise of fraudulent debit transactions that have been found to come off customer’s transactional accounts. You may not have signed a debit order consent form but some companies have unscrupulous ways of getting hold of your bank details. So comb through every line item in your statement and keep an eagle eye out for anything suspicious coming off your account.
8. Transact as much as you can online: If you transact over the counter or via telephone bank you are making use of a banks’ employee. Employees cost money and banks like to pass on this cost to their clients. Absa for instance charges R14 if you deposit a cheque over the branch counter but its free if you deposit a cheque using an ATM.
9. View statements and balance enquiries online: Absa charges R2.50 per mini statement, R14 for full statement over the counter but eStatements are free. The bank charges R2.45 for a balance enquiry over the counter whereas if you checked your balance at an Absa ATM there is no charge.
10. Make use of a bank charge calculator: Not sure how much you are paying in charges? Why not see how much you are being charged using your bank’s online calculator – Capitec, Standard Bank, Absa, Nedbank and FNB all have fee calculators or display their transaction fees online. You can also compare fees using Justmoney comparison tool, which compares bank fees side by side.
With so much information and technology readily available, there’s no excuse not to start reducing the amount your bank charges you today. Change your banking habits and start saving now.