The most expensive bank accounts in South Africa

While a battle rages on in entry-level banking, South Africa’s major retail banks have not shifted their attention away from the higher-end of the market – with new entrant, Discovery, banking on its behavioural banking model to win over the elites.

Discovery launched in the South Africa in mid 2019 with a noticeable absence in the entry-level banking market, which has become flooded with a host of low-to-zero fee accounts.

However, what Discovery lacked in option for low-level clients, it has made up for with its top-tier account – Discovery Purple – which has the highest barrier to entry to qualify among all the banks that target this market.

According to the Discovery Purple brochure, to qualify for an account, a prospective card holder would need to earn at least R2.5 million a year (over R200,000 a month) to take advantage of the major discounts and “bespoke account structure” on offer.

At this level, the Discovery Purple account has the highest publicised salary requirement out of all private bank accounts – with perhaps the exception of Investec.

Investec has no strict salary requirement listed on any of its accounts, but the private banking group has made no secret of the fact that it almost exclusively targets professionals and high net worth individuals – even crediting its very selective client base as the reason it has managed to weather South Africa’s volatile economic environment in recent years.

The last time Investec made its salary requirements publicly known was before 2017, where it was quoted at R800,000 per year. However, since then the bank has said that it assesses each application on an individual basis, on its own merits.

Other banks are more transparent.

Both Nedbank and FNB have Private Wealth offerings which require an annual salary of R1.5 million a year, or investable assets of R5 million for Nedbank, or a net asset value of R15 million for FNB.

RMB Private Banking – closely tied to FNB as part of the FirstRand Group – has the same entry requirements as FNB’s tier 2 private account (Private Banking), requiring an annual salary of at least R750,000, or the same net asset value of R15 million.

R750,000 is the same salary requirement for Absa’s Private Banking account – while Standard Bank’s Signature Banking account requires R1.1 million.

How many people in South Africa actually qualify?

The high barrier of entry for private wealth accounts means these banking services are reserved for the elite – with the ‘cheapest’ accounts only available to about 7.5% of taxpayers (or just over 0.5% of the population).

According to the latest tax statistics from SARS, of the 4.9 million taxpayers assessed last year, only 365,800 of them earn over R750,000 a year.

Even fewer fall into the higher income brackets, with around 148,000 qualifying for the R1 million limit at Standard Bank, and around 34,000 making the cut for Discovery Purple’s limit of R2.5 million.

SARS’ tax data represents only 75% of the country’s taxpayer base, so these numbers could be slightly higher in reality, but still represent a tiny portion of the population.

Read: This is how many South Africans earn over R5 million a year