Cutting costs by simplifying is EASY
Maya Fisher-French looks at the changes to FNB’s offering for entry-level customers
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.