South Africa’s cheapest bank accounts: Capitec vs the rest

Capitec has published its updated fee schedule for 2020/21, including a price freeze on the monthly account fee, debit orders and digital banking costs.

However, there are relatively steep increases for customers who continue to deal in cash.

According to Capitec, digital banking is changing the way South Africans are handling their finances, which underpins its digital banking focus.

While this bodes well for the bank’s ever-increasing presence in the middle market, the bank has lost some ground in the price war in the entry-level market which still largely deals in cash.

Of the 14 entry-level accounts in South Africa, only two (Bidvest Bank’s Grow account and Standard Bank’s Access account) have a higher monthly account fee than Capitec’s Global One Account.

Capitec customers can effectively pay off their monthly account fee through interest earned on a positive balance, but the entry-level market is increasingly seeing options that nix the monthly fee altogether, without these terms and conditions.

When it comes to putting money into, or taking money out of one’s account, Capitec now also falls somewhere in the middle of all the banks – with newer entrants such as TymeBank, FNB Easy Zero and African Bank’s MyWORLD account undercutting the bank’s previous lead in this space.

Monthly fees

Taking money out

Putting money in

Entry-level banking

South Africa’s entry-level bank accounts vary greatly in form and functionality, with several lenders offering more than one entry-level account.

For example, Nedbank has an extremely basic account in its MobiMoney account, which carries no monthly costs, but limited transactional capabilities.

The same can be said for the FNB Easy Zero account, which was formerly a mobile-only account with no card. This has changed for the 2019/20 period, but the account still cannot be used for debit orders.

These accounts are meant for low transactions (with limits set on how much money can be processed each month), with entry-level bankers looking for slightly more sophisticated transactions encouraged to move to the next tier.

It should also be noted that many of these accounts also offer rebates and interest on positive cash balances, which can offset many of the monthly transaction costs. These have not been taken into account here.

Discovery Bank does not have an entry-level transactional account and thus has been excluded.