Cut­ting costs by sim­pli­fy­ing is EASY

Maya Fisher-French looks at the changes to FNB’s of­fer­ing for en­try-level cus­tomers

CityPress - - Business -

Choos­ing the right bank ac­count is often chal­leng­ing, given the plethora of op­tions, and their cost­ings, of­fered by the banks. Hav­ing such a va­ri­ety of choices makes it dif­fi­cult to com­pare them and work out the best ac­count for your needs; and such di­ver­sity also drives up the cost of bank­ing. Capitec shook up the bank­ing world by in­tro­duc­ing Global One, a sim­ple, sin­gle so­lu­tion ac­count with highly com­pet­i­tive fees that are easy to un­der­stand. In re­sponse, FNB launched its Easy Ac­count six years ago, which matched Capitec’s of­fer­ing and, in fact, be­came the most cost-ef­fec­tive bank ac­count ac­cord­ing to the lat­est Sol­i­dar­ity Bank Charges Re­port.

Due to the suc­cess of Easy Ac­count, FNB has stream­lined its en­try-level of­fer­ing by merg­ing the Smart Trans­ac­tional Ac­count into the Easy Ac­count – re­mov­ing a layer of pric­ing com­plex­ity. This means that about 90% of Smart Ac­count hold­ers will see a re­duc­tion in their bank­ing fees as they are au­to­mat­i­cally mi­grated to the Easy Ac­count.

For ex­am­ple, the monthly ac­count fee on the Smart Pay-as-you-use op­tion was R12.50, but it will now cost only R4.95.

The Easy Ac­count has two pric­ing op­tions. The first is Pay-as-you-use, which has a monthly fee of R4.95 and cus­tomers are charged per trans­ac­tion, although cash with­drawals at a re­tailer or pur­chases made by card are free.

This is ideal for in­di­vid­u­als who do rel­a­tively few trans­ac­tions monthly. For ex­am­ple, a cus­tomer who makes two cash with­drawals a month, two cash de­posits at an ATM that al­lows au­to­mated de­posits, has one debit or­der and makes three pre­paid air­time pur­chases would spend about R22.50 a month on bank­ing fees.

The sec­ond pric­ing model is the R49 per month for Easy Bun­dle, which is aimed at cus­tomers who have sev­eral debit or­ders, monthly ac­count pay­ments and higher cash with­drawal or de­posit needs. It in­cludes a bun­dle of 10 free elec­tronic trans­fers, in­clud­ing air­time pur­chases, four free ATM with­drawals and free de­posits at an ATM that al­lows au­to­mated de­posits of up to R4 000 a month.

Pre­vi­ously, in-branch trans­ac­tions were not avail­able to Easy Ac­count hold­ers, but that has changed. How­ever, FNB aims to limit their num­ber by charg­ing a hefty ser­vice fee for them. A cash de­posit in-branch will cost a min­i­mum of R60 and a cheque de­posit will cost R40.

FNB also found that Easy Ac­count hold­ers – due to the flat rate fee – were be­ing pe­nalised for with­draw­ing smaller amounts of cash more fre­quently. The idea of a flat rate came about to en­cour­age cus­tomers to draw larger amounts of cash less fre­quently, but the bank found that Easy Ac­count cus­tomers pre­fer to with­draw smaller amounts more fre­quently. The with­drawal fee is now R1.85 per R100, so whether you with­draw R1 000 once a month or R100 10 times in the month, your to­tal cost will be R18.50.

An­other sim­i­lar trend FNB found was with the pur­chase of pre­paid air­time, with R5 be­ing the most com­monly pur­chased amount. The fee has now been re­duced to 50c per R5 of air­time from a flat fee of R1.10.

A cash-back re­ward pro­gramme has been in­tro­duced, so Easy Ac­count hold­ers are now able to earn be­tween 1% to 5% cash back on their Shoprite/Check­ers pur­chases. The re­ward level is based on the num­ber of ac­counts and prod­ucts you hold with FNB and whether or not your ac­count is in good stand­ing. You can earn an ad­di­tional amount of up to R40 a month, de­pend­ing on your prod­uct range. The re­ward is paid into a linked sav­ings ac­count, which earns 5.5% in­ter­est on bal­ances up to R20 000.

In sum­mary, the prod­uct is ideal for in­di­vid­u­als look­ing for low-cost, no-frills bank­ing, but it does not of­fer an over­draft fa­cil­ity – which is not nec­es­sar­ily a bad thing.

For cus­tomers who want more bells and whis­tles, and to also qual­ify for the FNB eBucks re­wards pro­gramme, the Gold Ac­count would be the next op­tion at R100 a month for un­lim­ited elec­tronic trans­fers, un­lim­ited pre­paid air­time pur­chases and free cash de­posits of up to R6 000 a month.

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