Bank Charges Report 2024: Transparency strengthened among the big five
12 February 2024
Banks are becoming more competitive and transparent. This is the finding of the latest bank charges report issued by the Solidarity Research Institute (SRI).
This year, the report focuses solely on bank charges rather than on comparing other value added. The five banks that form the core of the Bank Charges Report are as per usual Absa, FNB, Standard Bank, Nedbank and Capitec, with Tymebank and Bank Zero that have also been included in the online category.
According to Theuns du Buisson, economic researcher at the SRI, the report shows a significant increase in transparency about bank charges among the big banks in South Africa.
“While there may still be secrecy about rewards programmes all the banks Solidarity had contact with have agreed that more transparency is also needed about this aspect. It is already noticeable at most banks, and we will certainly analyse rewards programmes again in next year’s report,” Du Buisson said.
The importance of a good, user-friendly fees page is also briefly highlighted in the report.
“Nedbank has greatly simplified its fee structure and the layout of its page is now also easy to understand. It is more difficult this year than in the past to figure out FNB’s and Absa’s fees pages because of a layout that forces one to scroll between specific fees and included fees, especially in their bundled accounts,” Du Buisson said.
Another finding of the report is that clients who have no need for branches and extensive banking services get the best value by far from online banks such as Tymebank and Bank Zero.
“To do the 14 transactions in our basket at these banks, costs R14 and R17 respectively, while it would cost R41,25 at the closest competitor among the traditional banks.
For consumers with basic banking needs FNB’s Easy PAYU account again took the honours this year for both the 12 and 17 transactions basket.
“They simply include more free transactions than any of their competitors. Where it appears that other banks have decided to no longer market so aggressively to the low-income market segment, FNB is clearly still ready to offer accounts to everyone,” Du Buisson said.
In the middle income profile too, with a basket of 25 transactions, FNB’s Fusion Aspire Account is the winner. The monthly fee of R99 includes all the transactions in our basket, except the purchase of electricity. Capitec is in second place but cannot really compete in this category because it does not offer significant extra value such as an extensive rewards programme. If Capitec is left out of the equation, Nedbank is in second place, especially because all transactions in our basket are included in their monthly amount of R109.
For consumers with sophisticated banking needs, Nedbank’s Migoals Premium account is the cheapest, with a total cost of R240 compared to FNB’s Fusion Premier account which would cost R247 per month for the 30 transactions in our basket.
“Nedbank has clearly learnt from FNB’s win in 2023 by including the most free transactions in the monthly fee this year. In this way they could again be the cheapest in this category as well as being extremely competitive in the middle-class income accounts category, and this while being the most expensive last year. Regeneration is thus possible in banking.
“While consumers are reeling under the pressure of increased interest rates and inflation, banks are becoming more competitive year after year. Although the online banks are by far the cheapest for most consumers, one must take into account though that the traditional banks’ rewards programmes at least allow you to get something back too. We hope to next year analyse the new programmes promised by the banks,” Du Buisson concluded.
Read the full report here.
Issued by Theuns du Buisson, Economic Researcher: Solidarity Research Institute (SRI), 12 February 2024
