The cheapest bank accounts in South Africa compared

 ·3 Oct 2018

To determine the cheapest accounts, BusinessTech looked at the entry-level accounts across all South Africa’s retail banks, and calculated the monthly cost based on a set number of transactions.

The transactions used are those outlined by Solidarity’s Research Institute in its annual banking charges report. While the group has not published a new report for 2018, the transaction profiles have remained the same in each iteration.

According to Solidarity, the profiles are based on guidelines consistent with fee-saving guidelines published by the banks – promoting digital channels and reducing physical interaction with the banks as much as possible.

The banking profiles are split into low-income groups (12-17 transactions), middle income groups (25 transactions) and higher income groups (30 transactions).

While these entry level accounts are targeted at the lower-income groups, the comparison below takes into account the costs for all profiles.

The bank accounts

All of South Africa’s major retail banks offer an entry-level account, with even Old Mutual targeting this market sector with its own offering.

Capitec is most well known for targeting this particular market with its Global One account, which has set fees and an interest structure that allows customers with a sizeable monthly deposit to absorb the monthly costs entirely.

FNB has two accounts which target this market segment, with its Easy account recently joined by the mobile-only eWallet Xtra account, which carries no monthly administration fee. Because the eWallet Extra account does not have the same transactional capabilities as the other accounts listed here, it has been excluded from the comparison.

However, you can view how it compares in the breakdown here: The cheapest bank accounts in South Africa vs FNB’s eWallet eXtra

The other banks that operate in this market are Absa’s Transact account, Standard Bank’s Access account, Nedbank’s Pay As You Use account, and Old Mutual’s Money Account.

New disruptors entering into the local banking space are also expected to compete here, with African Bank preparing to launch a transactional account, and digital banks like Bank Zero and TymeDigital also looking to offer affordable entry points to banking.

The table below outlines how these accounts perform across the different transaction profiles.

Update: a previous version of this article used the incorrect SMS notification fee for FNB and Standard Bank. This is has been corrected and reflected in the tables below.

The difference

Looking at the various entry level accounts – they all follow fairly similar structures, with limited differences (usually on the prices). Structurally, FNB’s Easy Account and Standard Bank’s Access accounts differ from the rest (coming out as more expensive) based on how withdrawal fees are handled.

Both banks take a fixed fee per R100 approach, compared to the single fixed fees seen on other accounts.

Standard Bank’s SMS notifications vary, with the bank offering free updates for one cellphone number or email address – however, if a transaction is below R100, SMS notifications are charged at subscription of R2.52 per month. The comparison below assumes that users would subscribe to this.

Capitec, meanwhile, sets itself apart by its interest rebates, which lower the total price of the account. For example, a customer that has a balance of R10,000 will earn approximately R40 a month using a Capitec account, which would lower the top transactional profile down to R56.

Someone who does minimal banking will actually earn money by using the account.

However this is tied to the balance, and at lower levels (which would most commonly be seen by lower-income customers), the impact is less beneficial, but can still make it the most affordable account overall.

The tables below show the price breakdown according to the transactional profiles.

At the time of writing, Capitec only has 1 internal debit, for funeral policies. Debit orders for loans carry no charge.

The prices used in this article come directly from the banking brochures, using the information that the banks make available to customers. The sources are linked below.

Capitec Global One | Old Mutual Money Account | FNB Easy | Standard Bank Access | Absa Transact | Nedbank PAYU

Read: The cheapest bank accounts in South Africa vs FNB’s eWallet eXtra

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