The Financial Coach™ - Managing people & their emotions around money » bank fees

Moving forward…

Gregg — Thu, 27 May 2010 12:00:45 +0000

I was chatting with a friend of mine last night who was relating a phone call he had received from his bank who were encouraging him to “move forward” to their prestige banking account and all that comes with it for just R199 per month…55 “free” transactions, help with forex, 12 free cheques (does any one still use these?) blah, blah, blah,etc, etc, etc…

What amazes me is how easily people buy the marketing nonsense and how “loyal” people appear to be to their bank. The reality is that the bank does not care about your loyalty – they are relying on you continuing to believe that changing bank accounts is about the most difficult thing that you could do…and in some respect, thanks to Isaac Newton’s observation that a body will continue in its state or rest or motion unless acted on by an unbalaced external force, it is.

So here I am – that unbalanced external force telling you to get off your butt and stop wasting money. By changing bank accounts I have saved over R1560 in the past year…that is more than R15000 over a 10 year period…that’s a year of school fees at most primary schools…

You need to decide on the new bank (see below for a comparison) and then print out your most recent bank statement and make a list of all of the debit orders that come off. Then you need to write a standard letter that you can send to them all and cut and paste the relevent info for each company…and voila – it is done!

I kept my old account open for 1 month just to make sure that it all worked and guess what? It did! The only thing I missed was an annual debit – but it was not serious and was easily fixed.

You could also use the exercise as an opportunity to go over all your debit orders to make sure that you really still need them all – you could well be wasting more money than you think. And as they say in the classics…”look after the cents and the rands will take care of themselves…”

I’ve know that I have moved forward…just hope I dont need to move too soon again!

Basic banking fee comparison (this is for a fixed-fee offering on a current account and is based on information currently on the bank website):

Capitec – R4.50 but you pay per transaction after that – very competitive!
Nedbank Savvy account – R69 (have not paid a cent more than this each month for the past 12 months).
FNB – Smart Cheque – R69
ABSA – Silver Cheque account – R99
Std Bank Classic current account – R95
The last 3 accounts do not appear to be “unlimited” transactions and you could pay more – read the fine print and ask questions.

Bank fees…moving forward!

Gregg — Mon, 25 Jan 2010 16:58:44 +0000

10 months ago I finally changed my bank account…after almost 19 years at Standard Bank, I finally had enough of their fees and their complete lack of interest in me as a client and I moved to Nedbank – for no other reason than that they offered a very attractive fee structure.

For far too long I had been a “prestige” client of Std Bank – which I finally worked out, meant that I had the “privilege” of paying higher fees and little else – a full R185 per month (or R2220 per year) for a current account. I hardly ever went into the bank, hardly every used a cheque, never went into overdraft and most of my banking was via the internet.

The equivalent offering at Nedbank was R65 per month (R780/year).

So with some sense of dread at the thought of notifying everyone and sorting out the debit orders I finally moved. And it was pretty painless…and over the past 10 months I have now saved myself R1200 in bank fees!

Of course bank fees increase every year and the Nedbank fee has now increased to R69 per month (6% increase)…this is completely acceptable (in the current inflation environment, my opinion). At the same time, Standard Bank’s fees have increased to R199/month (7.5%).

Yes, there are a few differences in internet banking that have taken some time to get used to and I still think that Nedbank’s internet offering is the worst in SA but with a saving of R1560 per year, I can put up with that.

So if you are stuck in the fee “headlights” where you know that you really should be making a change but have not yet gotten around to it mostly because of the fear of making the change, just do it! It is not nearly as painful as the banks would have us believe. And if more people voted with their feet, there would be more competition and better pricing. So, in the words of my old bank, I’m “moving forward”!

Comparative banking

Gregg — Tue, 08 Sep 2009 18:44:22 +0000

After having been a client of Std Bank for 19 years I finally had enough of the ridiculous bank fees that I was paying (R185 flat fee) and moved to Nedbank (R65 for the same thing and an annual saving of R1440!). The process was a lot easier than I had anticipated and is something that I should have done years ago.

I did quite a bit of shopping around and apart from Capitec Bank, Nedbank was the cheapest option that I could find. They offer a flat fee of R65 per month for what appears to be unlimited transacting on a current account. I dont get a cheque book and I dont get any paper statements (big deal). The best that Std Bank could offer was R87 and then it was not unlimited transacting. At the time, FNB’s option was R79 pm and ABSA had nothing to offer in that price range.

So I moved to Nedbank and so far so good, except for internet banking.

I am in the fortunate position to be able to compare all of the major banks’ internet banking offerings. I have used Std Bank for years (and still use it for a business account), I am now using Nedbank and I do internet banking for 2 ABSA clients and 1 FNB client.

Sadly, Nedbank is the worst. It seems their site was developed when computers were developed – it is archaic, restrcitive and not very user friendly. ABSA and Std Bank are good and pretty user friendly but I think that from an internet banking experience, FNB has got to be tops. It feels good, looks good and it is easy to use! You appear to be able to do just about anything.

For example you can set up a monthly payment to someone else with no end date. At Std Bank you can load it for 12 months at a time while at Nedbank you can only do it 1 month at a time – still need to get used to that but am hoping too that they will “get with it” soon!

All of the internet offerings have similar secuirty levels to log in (FNB only requires a user name and password) but all of them require you to enter a one-time password to add or amend beneficiaries. Nedbank has a very frustrating “terms and conditions” page which you need to accept each time you log in. I guess the danger is that you get so used to it that you dont read it and miss them making changes to it…let the banker beware!

One very concerning feature about ABSA internet banking is the amount of “phishing” that I am subject to. Each time I use their internet banking I get an email the next day advising me that there has been “unusual” activity on my account and that I need to login in to sort out some or other details – it is quite clearly a scam but what is very worrying is that “they” know that I have been on the ABSA site.

All in all I am still happy at Nedbank and will give it a few more months. What this whole experience has taught me is that it is a mission to move bank accounts, but not nearly as much of a mission as we think and not even close to what the banks would have us believe. If you are not getting the service and fees you think you should then vote with your feet – it is the only way that the banks will take notice.

That’s all for now!

Gregg