Union Solidarity has released the 8th edition of its annual banking charges report, showing the cheapest and most expensive banking options across the major retail banks in South Africa.
The report is based on monthly banking fees from South Africa’s five biggest banks (Standard Bank, FNB, Absa, Nedbank and Capitec), across four client profiles.
Each profile represents a different type of banking customer, and covers a different number of transactions (from a basic 12 transactions, to a comprehensive 30 transactions).
The report breaks down these transactional groups into three distinct markets – namely the low-income market, middle income market, and the high-middle income market.
Low income market
In the low-income and basic banking space, judging on fees alone, Capitec is narrowly beaten this year by Absa’s Transact account, FNB’s Easy Account and Nedbank’s Pay-As-You-Use account.
“However, when the interest paid by Capitec is taken into account, Capitec is still, but just barely, the cheapest account. With that being said, Absa’s Transact account is now a truly compelling proposition for clients who rarely if ever hold more than R2 000 in their account,” said Gerhard van Onselen, Economics Researcher at the Solidarity Research Institute (SRI).
Low Income (12 transactions)
|#||Bank||Account||12 Transactions cost|
|1||Capitec||R5 000 balance||R13.33|
|2||Capitec||R2 000 balance||R25.79|
|4||FNB||Easy Account – PAYT||R30.35|
|6||Capitec||R0 balance (No interest)||R34.10|
|7||Standard Bank||Access – PAYT||R37.89|
|8||Old Mutual||Money Account||R40.40|
|9||Nedbank||Ke Yona Bundle||R52.00|
|10||FNB||Easy Account Bundle||R55.10|
|11||Standard Bank||Access Plus||R88.70|
Low Income (17 transactions)
|#||Bank||Account||17 Transactions cost|
|1||Capitec||R5 000 balance||R30.23|
|2||FNB||Easy Account – PAYT||R30.35|
|4||Capitec||R2 000 balance||R42.69|
|6||FNB||Easy Account Bundle||R50.35|
|7||Capitec||R0 balance (No interest)||R51.00|
|8||Standard Bank||Access – PAYT||R57.99|
|9||Old Mutual||Money Account||R59.70|
|10||Nedbank||Ke Yona Bundle||R85.00|
|11||Standard Bank||Access Plus||R100.80|
Middle income market
Looking at clients with middle-class income and sophisticated banking needs, the report showed that Standard Bank’s Elite Plus account is no longer the cheapest option among these bundle accounts, having been beaten out by Absa’s Gold account.
“After doing away with withdrawal fees for cash at retailers, Nedbank’s Savvy Plus account is competitive at this level this year for clients that do not wish to bank at Capitec for any reason,” Van Onselen said.
|#||Bank||Account||25 Transaction cost|
|1||Capitec||Global One (R10 000 balance – R41.54 interest)||R35.46|
|2||Capitec||Global One (R2 000 balance – R8.31 interest)||R68.69|
|3||Old Mutual||Money Account||R90.70|
|5||Absa||Gold Value Bundle||R103.00|
|6||Standard Bank||Elite Plus||R105.50|
|7||FNB||Gold Cheque Unlimited||R111.25|
|8||Standard Bank||Elite Rebate (R41.54 forgone interest)||R139.14|
|9||Standard Bank||Elite PAYT||R182.60|
High-middle income market
For accounts marketed at higher middle-class clients, Van Onselen said that Absa’s Platinum Value Bundle soundly beats the other banks on pure cost considerations.
“Costs are, however, not the only reason clients consider these more expensive accounts, which usually include additional benefits, and such benefits require individual consideration,” he said.
|#||Bank||Account||30 Transaction cost|
|1||Absa||Platinum Value Bundle||R165.00|
|3||Standard Bank||Prestige Rebate (R41.54 forgone interest)||R184.24|
|5||Standard Bank||Prestige Plus||R196.60|
|6||Standard Bank||Prestige PAYT||R227.70|