Cheapest bank accounts in SA

As South Africa’s top five banks duke it out over the position of most affordable in the country, BusinessTech looks at which institution offers the cheapest entry into the mainstream market.

According to FinMark Trust, approximately 75% of the South African adult population (aged 16+) is considered banked. This includes about 10 million adults who receive social grants (through SASSA), of which 8.2 million (82%) receive less than R3,000 a month.

This leaves a large gap in the market for the formal banking sector to grow their businesses with potential entry-level banking customers.

Each of South Africa’s banks offers a low-cost entry-level transactional account which allows customers to pay for transactions as they bank, with a minimal monthly maintenance fee.

Capitec’s Global One account has grown to be a dominant player in this field – but has also gained wider appeal and now competes with the big four banks in middle-level markets.

However, while the Global One account (which is currently the only transactional account offered by Capitec) compares rather favourably to its middle-market competitors, it is only the third-cheapest account on offer to entry-level customers.

FNB has often maintained that Capitec’s Global One account is most comparable with its entry-level account, FNB Easy.

FNB Easy carries a monthly account fee of R4.95 and charges R4.55 per R1,000 withdrawn at native ATMs (to a maximum of R9.10), effectively undercutting Capitec by 5 cents.

However, even FNB’s Easy account is still only the second cheapest available across the 5 major players.

In December 2013, after transitioning to Barclays Africa, Absa admitted that it had lost a large number of cutomers – specifically in the lower income bracket – to Capitec. This led to an aggressive push from Absa to compete directly with Capitec in the entry-level market.

According to Reuters, Absa Personal and Business Banking CEO, Craig Bond said that the group had lost “hundreds of thousands” of customers to Capitec and pegged a figure of R1.2 billion to spend over the next three years on refurbishing its branch network in South Africa in a bid to claw them back into the fold.

Subsequently, Absa, which proved to be the costliest middle-market account for taking out money you’ve deposited in the bank, now has the cheapest entry-level account with its Basic Transactional pay-as-you-use offering.

Cheapest bank accounts in SA

Bank Account Monthly fee Digital banking Withdrawal fee (Native) Withdrawal fee (Other)
Absa Transact R4.50 Free R4.20 R7.00
FNB Easy R4.95 Free R4.55 per R1,000 R9.10
Capitec Global One R5.00 Free R4.60 R7.30
Nedbank Ke Yona R5.00 Free R5.50 R7.50
Standard Bank Access Free Free cellphone banking R5.50* R6.70 + R3,50 + 1,10% of value

* First R1,000 only, 3,50 + 1,10% of value after

While Standard Bank offers its AccessAccount with no monthly maintenance fee, the bank’s withdrawal charges are limited to a flat rate only for the first R1,000 taken out of the account, after which a R3.50 + 1.10% of value charge will apply.

The bank’s charge to withdraw cash from another ATM is also the costliest by default, and its digital banking offering on the account also only applies to cellphone banking.

The rates above are based on pure PAYU prices and don’t include value, plus or any other bundles offered by the banks.

The basic transactional accounts, without bundles, place the onus on customers to be aware of what transactions they make.

The accounts covered do not include child, student or senior or any other special accounts offered by the banks.

More on SA banks

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Withdrawal fees: SA banks compared (2013)

Withdrawal fees – how SA banks stack up (2012)

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Cheapest bank accounts in SA