The First National Bank (FNB) Easy Account has been named the cheapest low income bank account in South Africa, according to the Solidarity Banking Charges Report for 2015.
“We are pleased to have been recognised as the bank with the cheapest account in South Africa. We are focused on bringing real value banking where customers can experience full-service banking, with no hidden costs,” said Jo-Ann du Plessis, head of pricing and product at FNB Value Banking Solutions.
The report looked at the account offerings from the largest five banks in South Africa. The report explained: “The 2015 Bank Charges Report, being an interim release, is not as comprehensive as the preceding five reports. A comprehensive report will again be released in the first half of 2016. This year's interim Bank Charges Report only covers the accounts which the largest five banks market to people with low income and the bundle accounts that are marketed to the middle income segment of the market. This year's report does cover these 12 accounts or account options comprehensively.”
The cheapest low income accounts
For the transaction profile of 12 transactions, the cheapest accounts, from the top, are as follows:
- The FNB Easy Account – R17.25 per month
- The Absa Transact Account – R24.25 per month
- The Standard Bank AccessAccount (pay-as-you-transact option) – R 25.20 per month
- Capitec Account – R31.90 per month
- The Nedbank Ke Yona Account (pay-as-you-transact option) – R58.00 per month
However, Solidarity highlighted: “A Capitec client with an average balance of R5 000 throughout the month would receive R18.37 interest at a rate of 4.5%, bringing Capitec into the lead with a net cost of R13.53 per month on this transaction profile.”
The results are similar for the transaction profile with 17 transactions per month, however, the Capitec Account moves to second place behind FNB when the interest earned on balances of R5 000 is factored in. These results are as follows:
- The FNB Easy Account – R27.95 per month
- The Absa Transact Account – R36.75 per month
- The Standard Bank AccessAccount (pay-as-you-transact option) – R 41.70 per month
- Capitec Account – R47.20 per month
- The Nedbank Ke Yona Account (pay-as-you-transact option) – R84.00 per month
It is important to note that unlike the Absa and Capitec accounts compared above, which have fixed ATM withdrawal fees, the FNB withdrawal fee increases as the amount that you withdraw increases. This means that if you withdraw large amounts of cash regularly, your monthly fee could increase.
Cheapest middle income market bank accounts
The report looked at the bundled account options from the five banks, aimed at middle market income consumers. It presented results for four different transaction profiles, 29 transactions, 24 transactions, 17 transactions and 12 transactions.
The results for these bundled options vary to the above lower income accounts, with Capitec offering the cheapest account across each of the transaction profiles, with its Global One Account.
The account offerings from the other four banks are similar with regards to cost. However, Standard Bank’s Elite Plus Account came in second behind Capitec, followed by the Nedbank Savvy Plus Account for the no cash at till option, the Absa Gold Value Bundled Account, and the FNB Gold Cheque Unlimited Account.
The results for these accounts are as follows:
|First Place||Second Place||Third Place||Fourth Place||Fifth Place|
|12 Transactions||Capitec R31.90||Standard Bank R 97.00||Nedbank R99.00||Absa R99.60||FNB R102.30|
|17 Transactions||Capitec R47.20||Standard Bank R98.00||Nedbank R99.00||Absa R100.40||FNB R 103.75|
|24 Transactions||Capitec R65.20||Nedbank R99.00||Standard Bank R100.00||Absa R102.00||FNB R105.75|
|29 Transactions||Capitec R80.50||Standard Bank R101.00||Absa R102.80||FNB R106.90||Nedbank R108.90|
However, if you include the cash at till option to the Nedbank Savvy Plus Account, it becomes the most expensive account.
Solidarity highlighted in the report: “While various kinds of transactions fall outside the bundles for these accounts, in the transaction profiles used in the Solidarity Bank Charges Report, the only regular fees that serve to increase the costs of these accounts above the nominal monthly fees are the fees for transaction notifications to third parties. Specifically the fee for notifying the beneficiary of an electronic funds transfer (EFT) by SMS that the payment has taken place. For Absa this fee is 80 cents, FNB's is R1.15 and Standard Bank charges R1.00.
“Nedbank does not charge for this service on the Savvy Plus account. Nedbank does, however, charge R4.00 per cash withdrawal at a point of sale (at a till), while the other three all include this for free.”
The report added: “As always it must be emphasised that bank clients need to be proactive in making sure that they are paying the lowest possible fees for the service they require. All of the banks in this Bank Charges Report have multiple accounts, apart from Capitec. Just because a specific account from one bank is the cheapest on one transaction profile does not mean that other accounts from that bank will also be cheap. Clients should be very aware of which specific account and account option they have, or risk paying much more than they have to in bank charges.”
For more information on the Solidarity Banking Charges Report 2015, click here.
The FNB Easy Account
The FNB Easy Account has a monthly fee of R4.95, according to the bank, and includes a number of free transactions. The free transactions include:
- Purchases in stores using the card linked to the account,
- Withdrawing cash at retailer till points such as Checkers, Shoprite and Pick n Pay, and
- Using electronic channels*, as well as
- inContact SMS notifications keeping customers informed of transactions going through their account.
Consumers who make use of the FNB Easy Account also enjoy the benefit of a Linked Savings Account. The savings account earns up to 4.75% interest, depending on how much is in the account. The FNB Bank Your Change system rounds up the cost of card purchases and transfers the difference between the purchase amount and the rounded-up amount into the Linked Savings Account.
“We have found that the Linked Savings account actually helps our customers to save, as moving money from one account to a savings account makes it easier to separate allocated money towards saving and reduces the chance of using it for everyday expenses,” noted du Plessis.
Furthermore, through FNB’s new mobile service offering, FNB Connect, customers can receive R10 back in prepaid airtime for every R100 of qualifying spend.
“We realise each customer is different and they have different requirements from their bank, so it’s up to FNB to offer a range of solutions whether this is getting a loan, sending money home through mobile banking or banking affordability,” explained du Plessis.
She added: “Digital and electronic banking are critical to the long-term sustainability of low-cost banking. To enable FNB’s strategy to migrate its customers to digital platforms, electronic transactions* on our Easy Account are free. The convenience, cost effectiveness and safety of these channels enable us to pass on cost savings to the customer.”
*Free electronic transactions include transfers, scheduled payments or stop orders and balance enquiries at an FNB ATM or using FNB Cellphone Banking and Online Banking.
The Capitec Global One Account
The Capitec Global One account offers customers a fixed ATM withdrawal fee, no matter how much they withdraw, as well as no purchase fee when using your card to pay for shopping, accounts and fuel.
The account has a monthly administration fee of R5.00 with a minimum balance of R25.00 required. Declined transactions for insufficient funds at a card machine or Capitec Bank ATM are free.
For more information on the Capitec Global One Account, click here.