The cheapest bank accounts in South Africa

South Africans are currently facing major economic headwinds, with the poor the most affected.

In its financial results for the six months ended 31 March 2023, African Bank said that its credit impairments skyrocketed – up 240% to R2,240 million (H1 22: R658 million) – as its clients, mainly in the lower-income segment, struggled with high food prices and fuel inflation.

Moreover, Capitec, which also primarily caters for the lower-income segment, said that its total net credit impairment charge on gross loans and advances grew by 80% to R6.3 billion (2022: R3.5 billion).

Capitec added that the difficult economic conditions have seen more of its clients going into debt review, moving into arrears and default and balances being rescheduled.

Amidst the struggling economic environment, BusinessTech decided to look at the cheapest entry-level bank accounts.

Monthly fees 

Monthly management fees for entry-level accounts are the most obvious charge for consumers, with banks fighting to undercut their competitors.

Given the nature of most entry-level accounts, the monthly handling fee is quickly becoming obsolete, with six of the 11 accounts not having a monthly admin fee at all.

Capitec, the pioneers of the low-fee account scheme, offers the most expensive monthly admin fee at R7.00

Although monthly fees can be rebated within the account, this analysis looks only at the fees.

Withdrawals

Although banks are increasingly trying to digitise all payments, cash remains king in South Africa, especially amongst lower-income groups.

However, having cash on hand is still a necessity for middle- and upper-income households.

Banks will offer withdrawals at their own-brand ATMS or via partnerships with retailers, such as TymeBank’s partnership with Pick n Pay. Accessing cash at a competitor-branded ATM will usually incur a higher cost.

According to the data, Old Mutual’s Money Account has the highest fees (R15,00) for a R500 withdrawal.

Deposits 

Deposits are less rigid than they once were, with customers able to place deposits at ATMs, branches, points of sale or digitally.

Despite running on a no Fees basis, Bank Zero has the joint highest fee (R19.95) when depositing R500.

On the other end of the scale, the FNB Easy Zero and Shoprite Money Market accounts offer no fees for a R500 deposit.

A more in-depth analysis of the fees offered by South Africa’s banks can be found below: