Switching banks is a save bet
Published 23/01/2014 | 02:30
Customers are getting tired of current account fees going up
THE choice of bank that people use for their day-to-day transactions runs in the family, research indicates. This is particularly the case with younger people.
More than four out of 10 of those under the age of 35 bank with the same institution as their parents.
But those between the ages of 35 and 44 are less inclined to bank with the same institution as their parents, the research carried out by Amarach for Permanent TSB shows.
The research also found that younger people, who are generally those earning the least, are spending the most on bank charges.
The 15- to 24-year-olds visit ATMs more frequently than other age groups. ATM fees are one of the main drivers of day-to-day banking fees.
Couples with two current accounts have been warned that they face paying €260 this 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.
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?" The Amarach research found that there is a high level of satisfaction with the process of switching banks among those who have done it.
Three out of four of those who did it said they are satisfied or very satisfied with the level of co-operation and assistance they got from their new bank.
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 of €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 last 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 as long as €1,500 is lodged to the account every month – the account does not have to be kept in credit for this amount.
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.
Case study: Valero Cartagena Collings
SAVING money is important to Valero Cartagena Collings.
A Spaniard and a manager with Dunnes Stores, he likes value for money as much as he likes football.
He recently switched bank accounts from Bank of Ireland to Permanent TSB, and is delighted with the move.
He gets free banking from his new bank as long as he has at least €1,500 going into the account every month.
Married to Irishwoman Pamela, the couple live in Tallaght in Dublin and have two boys – Charlie (6) and Enrique (4).
Originally from the Gran Canaria region of Spain, he had been banking with Bank of Ireland for 10 years before he was tempted to make the switch to Permanent TSB.
The couple were originally attracted to Permanent TSB by the offer of transferring the balance on their credit card to avail of a six-month zero interest deal.
Of the move, he said: "I understand banks have to charge you to make money but I decided to move because there are better benefits from Permanent TSB."
The couple bought their own house seven years ago and feel it is important to keep costs down.
The switching process was straightforward and the move was arranged after just two meetings with the new bank.
"I am happy with the move. The savings are not huge, but even a small amount of savings is important," he said.