Families feel squeeze as bank charges soar
Couples with two current accounts will be forced to fork out €260 next year
Published 26/12/2013 | 02:30
Many don't realise that it's pretty easy to switch
FAMILIES face another squeeze on their finances as banks introduce a range of stinging charges just for the process of day-to-day banking.
A couple with two current accounts have been warned that they face paying €260 next year in bank charges alone.
Moves by AIB, Bank of Ireland and Ulster Bank to introduce and increase charges are set to drain close to €270m out of the household finances.
And thousands of people have just weeks to find new banks with the fast-approaching closure of the retail operations of Danske and ACC.
Personal finance experts advised those who bank with ACC and Danske, and people with AIB, Bank of Ireland and Ulster Bank who are being hit with charges, to switch accounts.
Simon Moynihan, of price-comparison site Bonkers.ie, said: "A lot of bank customers are getting tired of current account fees that seem to keep going up.
"But many don't realise that it's pretty easy to switch."
He stressed that the Central Bank has a code that demands that your bank has to help you to change to another.
"It is still possible to bank for free. So why keep paying for a current account when you may not have to?"
Eight out of 10 people have underestimated the amount they are charged by banks, according to research by Amarach and Dr Michael Dowling of Dublin City University.
"For of every four people you see queueing at the ATM, at least three of them are being unnecessarily charged fees for withdrawing cash and at least one of them is desperately unhappy with their banking provider," the lecturer said.
He said rather than being loyal, consumers were guilty of inertia.
AIB charges €4 a quarter and up to 39c per transaction unless €2,500 is kept in the account at all times.
Bank of Ireland requires a credit balance €3,000 at all times to avoid transaction charges of up to 40c each. But even if €3,000 is kept in the account, it has been charging a maintenance fee of €5 a quarter since August. Ulster Bank introduced a €4-a-month maintenance charge for current account customers this summer if they fail to lodge at least €3,000 or keep a balance of €3,000 a month in their account.
KBC Bank has a €6 quarterly charge, with charges of up to 30c per transaction if the balance falls below €2,000.
Permanent TSB offers fee-free banking if €1,500 is lodged to the account every month.
But some customers face a different problem as their bank may be scaling back its operations.
Customers of Danske Bank have been told they have just two months to close their accounts. Around 50,000 customers have already been written to.
The bank is shutting its retail operation, but will give those with credit card accounts a month longer to clear their balances and find a new card provider.
Danske Bank said in October it was winding up its business and personal banking operations with the loss of 150 jobs. Danske customers with savings accounts will be told to close their accounts two months from the date of the letter from the bank.
As Danske does not handle cash or cheques, customers have been informed in the letter they can withdraw any balance by electronic transfer. This will mean customers affected will have to have another account in place to accept any money coming out of the account they are shutting down.
And Danske has ruled out providing loans to people with credit card balances they are unable to clear. When Halifax closed in 2010, it turned card balances into loans for those who could not find another bank to take them on.