Capitec vs. FNB vs. Nedbank vs. Absa vs. Standard Bank
The Solidarity Research Institute (SRI) has released its latest bank charges report, showing how the prices of South Africa’s largest banks compare, based on different user profiles.
For its 2021/22 report, Solidarity hailed online banks as the ‘heroes’ of the year, noting that new entrants to banking like TymeBank and Bank Zero are highly disruptive with fee-free banking options and taking advantage of mobile technology to manage finances.
“It seems like a revolution is underway in banking as TymeBank and Bank Zero are offering the same services as traditional banks, but at a fraction of the price,” the research unit said.
“It will even be possible to do business in these banks completely free of charge if cash transactions and sending money to mobile phone numbers are avoided.”
The group said that although banks are increasingly competitive in terms of added value such as rewards programs, costs are still a driving factor. Here it is also clear that competition in the banking sector is increasing, he said.
“New online banks, which compete on cost alone, are by far the big winners on cost alone. A list of 25 transactions that would cost between R99 and R143 at traditional banks, costs only R21.50 at Tyme Bank or R25 at Bank Zero.
“Even compared to the cheapest accounts of traditional banks, those with branches, traditional banks are far behind,” Solidarity said.
Comparison of bank charges
Solidarity’s bank fee comparison is based on four different transaction profiles, divided into four different groups. Transaction profiles 12 and 17 are most often associated with low-cost or entry-level banking services; 25-trade profile aligns with mid-market accounts; and the 30 trade profile for premium accounts.
The research unit said that for 2022, the methodology and profiles have been adjusted to keep pace with changes in consumer behavior.
“The list of transactions includes fewer cash transactions this year. These have been replaced by sending money to mobile phone numbers, as well as internet transfers. The latter is now free for all accounts, except for very simple transaction accounts. In both online banks, internet payments are also free,” he said.
Low cost accounts
Of the traditional banks’ low-cost accounts, Absa and Capitec are the cheapest, with Absa charging a total of R37.10 for the basket of 12 transactions. Capitec, which charges 80c more at R37.90 is in second place.
“However, Capitec is the winner in the category of 17 transactions with a total amount of R42.90 for this basket of transactions. FNB’s Easy PAYU account is in second place with a total of R54.45. Capitec is also the only one of the big five banks to offer interest on transaction accounts,” Solidarity said.
Middle Market Accounts
For the average middle-class consumer, usually covered by traditional banks, FNB came out on top with its FNB Aspire checking account.
“Like other accounts in this category, this is a bundled account with a fixed amount that includes a series of free trades. FNB is by far the winner in this category as all trades on our list are included in the fixed amount of R99,” Solidarity said.
Standard Bank’s MYMO Plus account is in second place, with an amount of R129.40.
Premium banking services
For premium or “sophisticated” banking needs, FNB also takes top honors with its FNB Fusion Premier account, with a total cost of R236 for the 30 trade list.
Absa Premier Banking takes second place with a total amount of R242.50.
“These two banks offer good value for money because the number of free transactions they offer is higher than that of Nedbank and Standard Bank,” Solidarity said.
In the online/digital banking segment, only four accounts are covered: TymeBank, Bank Zero, Spot Money and Discovery Bank Gold Account.
These banks are online only, with no branches. They also do not have a large number of ATMs, with much less staff than traditional banks. This, in turn, should limit their costs to the consumer, Solidarity said.
“For these banks, we used the same list of transactions as for the 25-transaction profile, except that ATM withdrawals replaced ATM transactions at participating retailers.”
Although Spot Money offers banking services, its purpose is to encourage cashless transactions and lacks many more traditional transactional services. Thus, it was excluded from the final comparison, the group said.
Among digital banks, Discovery stands out as being relatively pricey compared to TymeBank and Bank Zero – however, Solidarity noted that even at R90 it is still more affordable than most traditional bank offerings.
Read: Here are all your bank charges for 2022