The ins and outs of banking fees

One of the most important things for consumers to consider when reviewing their bank account fees is whether they have the right account for the way that they transact.

“A bank account should be considered a partner, and choosing the right partner for your lifestyle will go a long way in avoiding frustration, unnecessary costs and wasting time,” says Ryan Prozesky, CEO of Value Banking Solutions at FNB.

Monthly account fees

When reviewing the fees you pay on your bank account, the focus should not be solely on the actual monthly account fee but rather what you can do for that fee and the inclusive value offered.

“If you have basic banking requirements, then a bank account with a very low monthly account fee and a pay-as-you-use structure, such as FNB’s Easy Account from R4.95, will probably be the most cost effective,” says Prozesky.

However, if you use your account more frequently it is wise to choose an account that offers a transaction bundle to best suit your transactional needs. A bundle option on your account will allow you to perform multiple or unlimited transactions, without incurring extra costs.

High fee transactions to avoid

Cash is expensive due to the transport costs, additional security and associated insurance costs. The best thing to do with your cash is to deposit it at an ATM that allows deposits or even better is to get the funds deposited electronically into your account. Some of FNB’s accounts offer free deposits up to a certain amount on a monthly basis.

“A good alternative to using cash is to swipe your debit card. Not only is swiping a safer option than carrying cash; but often does not attract any transaction fees,” states Prozesky.

If you absolutely need cash, some banks have an agreement with certain retailers to make free withdrawals at the till.

Benefit of electronic banking

Banking electronically is more convenient, cheaper and can be done anywhere at anytime.

Apps, in particular, have become an essential as they allow you to bank using your smartphone or other electronic devices. Using electronic platforms is cheaper for a bank to administer which means that the bank can pass on the saving to the customer.

The vast majority of transactions can now be done on these electronic channels, such as looking up balances, drawing a mini statement, pre-paid transactions and making payments.

Savings accounts

A savings account is a valuable tool to help make your money grow. This type of account generally has a good interest rate with no monthly fee, and should ideally be separate to your transactional account. This eliminates the temptation to spend savings while making daily transactions.

There are various savings accounts to choose from and the deciding factors on which type will be what you need your savings account for. There is no such thing as small change; every cent counts.

Rewards on bank accounts

Most bank accounts come with some type of value add or reward. These rewards are used by banks to incentivise and reward customers to continue banking with them, as well as to bank in a cost effective manner. Looking into and taking full advantage of these benefits is worth your while.

There are different rewards structures as well. Some accounts will reward you in loyalty points which are accumulated and can be used to purchase goods, while others will give you cash.

Make sure that the rewards system and value-adds really work for you and your lifestyle. If you understand the rewards programme and if you use your bank account efficiently you will be able to not just save money, but could actually get back more than you pay in bank fees.

Finally, aside from the actual banking fees, it is also worth looking at how your bank account can fit into your lifestyle. Such as, do you need access to credit such as home financing or start up a business one day or access to a mobile money service to send money to someone without a bank account?

“In the end, your bank account should fit comfortably into your lifestyle and offer you services that add value and are cost effective,” concludes Prozesky.